April brings shower of changes for small firms

With a raft of new legislation coming into force at the beginning of April, small firms may overlook some of the provisions which apply only to them.

The Institute of Chartered Accountants in England and Wales (ICAEW) has highlighted some of the changes taking place at the start of April as part of the on-going implementation of the new Companies Act.

Clive Lewis, Head of Medium Issues at the Institute of Chartered Accountants in England & Wales explains the changes for private companies.

Filing accounts with Companies House

"At present private companies have 10 months from the end of their annual accounting periods to file their accounts with Companies House. This period will reduce to nine months for accounting periods beginning on and after April 6 2008."

Company secretaries

"The post of Company Secretary will be optional for private companies from April 6 2008.

"Company secretaries currently in place may resign from that date and need not be replaced, although all the Companies House documents they currently deal with still have to be completed and filed. This change will make it easier for one person to run his or her own company alone.

"For greater privacy from April 6 company secretaries may give a service address for publicly available details."

Other changes

Clive Lewis reminded small companies that other changes had already come into force or will do later in the year:

AGM

"Private companies no longer have to hold an AGM unless specifically required to do so by their articles."

Company registration

"The company registration number, registered office and country of registration must all be stated on the company websites, order forms and letters, including all emails sent on behalf of the company. Failure to do so could result in a fine of up to £1,000. This applies to all companies, but may have greatest effect on smaller organisations doing a lot of their business by email."

Company directors

"Company directors can now carry on after the age of 70, but from October 1 2009 all young directors under the age of 16 will have to resign. The duties of company directors are now written in law for the first time. This may increase the possibility of litigation, so companies should review their insurance policies."

Loans

"Another change which came into effect last year means that loans of up to £10,000 can be made to directors without shareholder approval."

Purchasing company shares

"From October 1, 2009 private companies will be able to provide financial assistance to purchase their own shares. This will make company restructuring an easier process. However, the directors will still need to justify the financial assistance given."

Sole director

"Some companies use another company to fill the post of sole director, to protect the personal details of the owner of the company. This will not be allowed from 1 October 2009."