The easiest way to ensure that your business complies with the Companies Acts

For some business entrepreneurs the word ‘compliance’ causes shivers down their spine and a lot of headaches. ‘It’s such a time-consuming job and I have to focus on bringing new customers to the business! I cannot spend my time doing so much paperwork!’, they often shout in despair.

Directors of large organisations have a slightly different problem: ‘Is my company fully compliant with the latest laws? What if my financial director is too busy that he or she turns a blind eye to legal issues’, or, ‘Does business compliance cost me too much?’.

The problem is that every company, large or small, private or public, must comply with the Companies Acts and file relevant documents with Companies House by fixed deadlines. Failure to do so might result in financial penalties and possibly more serious legal consequences for the company.

So what’s the solution?

The easiest and usually most cost-effective way to ensure that your business complies with the law, and to enable the directors to concentrate on pursuing the company’s strategic aims, is to appoint an experienced company secretary to manage the compliance matters.

Outsourcing this function to company secretarial specialists brings further benefits, such as:

· time and money savings
· assurance that your compliance issues are dealt with by professionals who possess detailed knowledge and experience
· no more penalties or risks to your company’s reputation for late filing
· possibility to focus on the company’s core activities rather than its administration and legal issues.

What does a company secretary actually do?

A company secretary, known as a corporate secretary in the United States, is a senior role in a private or public organisation, responsible for company's compliance, governance and liaison with regulatory bodies, such as Companies House. A company secretary often acts as a chief administrative officer enabling the company directors to concentrate on core company functions and running the business.

Responsibilities of company secretaries vary depending on the size of the company and complexity of its operations. Typically, a company secretary in a private limited company:

· provides guidance to the board on the members’ requirements and obligations contained in company law
· maintains statutory registers, transfers shares and issues new certificates
· updates the company file with the Registrar of Companies within specified time limits
· ensures compliance with company law, commercial law, health and safety law, environmental law, employment law, etc
· liaises with shareholders, distributes notice of meetings and annual returns to them
· prepares legally required documentation and oversees legal matters. This requires company secretary to be familiar with commercial, employment and other laws.
· manages company and board meetings, compiles and distributes minutes
· files accounts and annual return within specified time limits
· carries out instructions of board
· acts as board and/or chairman’s confidante
· protects the company’s assets such as the statutory books, records of the company, confidentiality of the board’s work and other aspects of corporate security
· supervises the arrangements to allow shareholders and other parties to inspect certain records of the company and to provide access to statutory and other bodies to inspect other records
· for listed companies, liaises also with the Stock Exchange and ensures the requirements of the Listing Rules are complied with.

Conclusion

You will notice benefits of having a company secretary dedicated to managing your compliance matters really soon. Outsourced specialists will provide even more advantage to your business in the current hard times.

A big mistake of a big company?

It is big news today that an Anglo-Australian mining company has decided to quit London-based law firms and recruited in-house lawyers in Delhi to work on drafting company contracts and reviewing documents, apparently saving a significant amount of money.

Before making such a big decision, the company could have considered alternative solutions such as using the services of a firm of experienced company secretaries, whose one of many responsibilities is contract and document review in accordance with legislation and statutory obligations. Some might not know, but company secretaries do a lot of legal work which isn’t classified as legal in standard terms. Their hourly rates are much lower than the lawyers’ rates, they know company law inside out and have the appropriate reference libraries available.

It might be well worth for companies in a similar situation to call us first and check what a company secretary can do for them.

New government business package

A new publicly-funded package for companies with difficulties to access previous government financial schemes has been introduced via Business Link. The new schemes are designed to help companies with financial problems, insufficient money for research and development, training, exporting and other common business and sector issues.

Increase of the statutory redundancy payment

The weekly limit of statutory redundancy payment is increasing from £350 to £380. The government’s decision has been announced in the 2009 budget and the limit is supposed to remain unchanged till February 2011.

Only employees with 2 or more years of service with the same employer are entitled to a redundancy payment from their employer.

Impact of the National Minimum Wage

The government is planning to implement a new National Minimum wage policy on 1st October 2009. Today BIS has published final assessment of the impact the National Minimum Wage Regulations (NMW) will have on the economy.

On 1st October the hourly rates of low paid workers will increase to £5.80 for 22 year olds and above, £4.83 for 18 to 21 year olds and to £3.57 for 16 to 17 year olds.

The government made the decision on the minimum rates after analysis of recommendations made by the independent Low Pay Commission.

Designed to remove barriers which halt equality, the NMW policy is meant to have a positive impact on all workers in low paid sectors. However, the group most likely to benefit from the uprating are women, ethnic minorities and people with work-limiting disabilities as they are more involved in the labour market and in low-paying sectors.

Is British economy recovering?

The April manufacturing figures published today by the ONS show that the manufacturing output rose unexpectedly by 0.3%. Is it the sign of the UK economy starting to recover?

According to Chief Economist at the British Chambers of Commerce, the recession is not over and ‘any talk of recovery at this is premature and potential misleading’. ‘Threats to the manufacturing sector's skills base remain serious, and it is important for the government to take steps that enable viable firms to retain their precious skilled workforce.’

What you should know about annual return (Form 363)

An annual return is a presentation of company’s certain data at the made-up date (which usually is the anniversary of the company incorporation). Every company is required by law to submit their annual return to Companies House before due dates.

An annual return contains general company facts, such as the name and type of the company, registered office address as well as details of company directors, shareholders and share capital (if appropriate), and other data.

How do I know when to file annual returns?

Companies House will send a letter to your company’s registered office to remind you when your annual return is due. You must complete and return to Companies House your annual return within a fixed time limit.

Usually companies choose to use professional service providers to look after their annual return forms. More information on annual return service can be found on London Registrars’ website.

Company secretary and their responsibilities

We often meet people who confuse company secretary function with casual typing and answering the phone job. So who a company secretary is?

Who is a company secretary?

A company secretary, known as a corporate secretary in the United States, is a senior role in a private or public organisation, responsible for company's compliance, governance and liaison with regulatory bodies, such as Companies House. A company secretary usually acts as a chief administrative officer enabling the company directors to concentrate on core company functions and running the business.

Public companies must by law have a company secretary.

The job of company secretary is often outsourced to external specialists, such as accountants or company secretarial service providers.

Company secretary's responsibilities

Company secretarial responsibilities usually include the following:

· maintaining the statutory registers
· transferring formalities on a change of ownership
· completion of the annual return
· reminders for company statutory accounts preparation
· filing the documentation required at Companies House on time
· management of board meetings and annual general meetings, preparation and distribution of documents, notices, resolutions and minutes
· organising share placings
· ensuring Directors’ statutory duties are fulfilled.