Should you still incorporate a company with Model articles? What a judgement in a recent case means

For those who might otherwise be unaware, the Model articles of association take the form of a legal document outlining the standard default provisions that regulate how a company is run.

If you are looking to incorporate a limited company, articles in the firm’s constitution will set out the internal rules and regulations that the company’s members and directors are required to follow.

It is a legal necessity for any public or private company formed in England and Wales, Scotland, or Northern Ireland to have articles at the time of incorporation.

The question of having one, or multiple directors

The Companies Act prescribes a standard format for the “Model Form” articles, with this “Model Form” being applicable in the event of the company not having commissioned a set of bespoke articles for it.

However, there are various circumstances in which the suitability of the Model Form articles might be in question, and a recent court case has shone the spotlight on one potential issue: the number of directors required in order to form a quorum at a board meeting.

According to Model Article 11(2), the quorum for directors’ meetings may be fixed, from time to time, with this decision being made by the directors. However, it must never be below two, and in the absence of the quorum being otherwise fixed, it is indeed two.

Model Article 7 says that if the directors make such a decision, it is required to be either a majority decision at a meeting, or a unanimous decision, taken in compliance with Model Article 8.

Model Article 7 proceeds to state that in the event of (a) the company only having one director, and (b) no provision of the articles stipulating a need to have more than one director, certain formalities that would otherwise come into play for director decisions will not be applicable.

Clearing up the confusion about how Model Articles 7 and 11(2) work together

The exact mechanics of the relationship between the aforementioned Model Articles hasn’t always been entirely clear to some observers. Some people believed, for instance, that Model Article 7 gave just one director – a sole director – the ability to always act and make all decisions.

However, the recent court judgement stated that Model Article 11(2) actually amounts to a quorum of two directors being needed. This means it is necessary for two directors to be present if a meeting is to be quorate.

In practice, then, a company that makes use of the unamended Model Articles is required to have a minimum of two directors in order to manage the business and make decisions in relation to the company.

London Registrars is working closely with a team of specialists in company secretarial and business support services who can be by your side to assist you in fulfilling your corporate governance and compliance responsibilities.

Our team here can also assist with our process agency services. For more details about the advice, guidance and support we can provide, please do not hesitate to contact our specialists via phone or email.

May 2022

What did the recent Spring Statement have to offer to businesses?

On 23 March 2022, UK Chancellor of the Exchequer Rishi Sunak gave his Spring Statement speech.

It came ahead of the start of the new UK tax year on 6 April – and there is no question that the present burden on businesses is substantial, as taxpayers start paying for the Government’s costs incurred in its response to the COVID-19 pandemic.

What measures has the Government set out in support of UK firms?

In its Business Support Factsheet, the Government said that it would “always stand behind businesses in the UK, which is why we’ve announced further measures at Spring Statement to support them in the uncertain months ahead.”

The Government added that as part of its efforts to bolster UK-wide growth and productivity, it had also outlined “plans to incentivise firms to train more, invest more, and innovate more through cuts to tax”.

To the end of achieving the above goals, the Government laid out the following Spring Statement measures that it said would be of benefit to businesses in the UK:

  • A 12-month cut in fuel duty on petrol and diesel, by 5p a litre, taking effect from 6pm on 23rd March 2022
  • An increase in Employment Allowance from £4,000 to £5,000 – a move the Government said would benefit about 30% of all businesses
  • An exemption on business rates for green technology being brought forward; it means such green tech as solar panels and heat pumps will be exempt from business rates from April 2022, for businesses in England only
  • Reformation to R&D tax credits to help drive innovation. From April next year, firms will be able to claim relief on the storage of their vital data and pure maths research – a move intended to boost sectors such as AI, robotics, manufacturing, and design
  • Plans to encourage increased business investment after the end of the super-deduction in 2023; this relates to a series of already-announced policy changes to the existing capital allowances regime in the UK, with these to be considered by Government before April 2023

The Government said that these announcements would bolster the existing business support package. Those existing measures include – but are not restricted to – eligible firms now being able to receive a temporary business rates relief, and the business rates multiplier being frozen for another year, saving businesses some £4.6 billion over the coming five years.

What has the reaction been from the business world?

Response to the Spring Statement from representatives of UK business were mixed at best. Shevaun Haviland, director general of the British Chambers of Commerce (BCC), perhaps best summed up the sentiment, describing the announcement as a “missed opportunity to rebuild and renew the economy and ensure business has the resilience to weather the uncertain and volatile times ahead.”

Meanwhile, the Confederation of British Industry (CBI)’s director general, Tony Danker, said to the BBC that there was some good news in the Spring Statement from a longer-term perspective, such as looking into how to bolster business investment and improving the R&D tax credit.

But in terms of more immediate challenges, he added: “We’re going to struggle to help small business owners unless we tackle the energy problem. When it came to help for small businesses, I’m not sure there was enough today.”

Looking forward, make sure you have the right business support professionals by your side

At a time characterised by considerable business uncertainty and not always predictable challenges, as a business owner yourself, you are likely to appreciate advice, guidance and support that will assist your firm in surviving and thriving over the months and years to come.

We can provide such tailored business support solutions here at London Registrars, ranging from directors’ service addresses and the preparation and submission of the annual Confirmation Statement, to the maintenance of statutory registers and the minute book. Simply contact us now to learn more about all the ways our professionals could help you.

April 2022

Russia’s invasion of Ukraine: what has been the impact on UK businesses so far?

The situation over the last few weeks concerning the Russian attack on Ukraine has been an exceedingly fast-moving one, and there has been much turbulence and unpredictability arising from the crisis for businesses in the UK, too.

Indeed, it is only now – several weeks after the beginning of the major escalation of the broader Russo-Ukrainian conflict that has been ongoing since 2014 – that we can begin to get a serious sense of what the military invasion could mean for British businesses in months and years to come.

A conflict that has exacerbated previous inflation and supply-chain worries

Even prior to the commencement of what Russia has termed a “special military operation” rather than an invasion or war, businesses in the UK and around the world were struggling under the weight of hefty inflation and considerable supply-chain disruption.

In the early stages of the conflict, experts were quick to warn that the crisis would amplify the already-adverse hit delivered to the global economy by the COVID-19 pandemic, and help drive up the costs of energy, shipping, and commodities.

With regard to the UK specifically, the Government has moved to reassure those concerned about the potential impact of the war on gas supplies to homes and businesses, stating that “the current situation facing the UK is not a question of security of gas supply, but of high gas prices set by international markets.”

The Government added that the country’s exposure to volatile gas prices elsewhere in the world “underscores the importance of our plan to generate more cheap, clean renewable energy and nuclear power in the UK to reduce our reliance on expensive fossil fuels.”

Even putting to one side the gas-price situation, however, concerns have been voiced since the onset of the conflict about potential new or escalated cost pressures right along the supply chain. Emerging signs of wavering business confidence.

While the seemingly short-lived impact of the Omicron variant of COVID-19 has recently helped buoy business confidence in the UK, we are now starting to see indicators of the negative effects of the Russia-Ukraine situation.

Speaking to the UK Parliament’s Treasury Committee recently, Tony Danker – director-general at the Confederation of British Industry (CBI) – indicated that businesses’ confidence was beginning to fade, due to heightened costs for energy and other inputs.

Businesses to have expressed concerns about difficult economic conditions ahead have included drinks maker Fever-Tree, and The Restaurant Group (TRG), which operates 400 restaurants and pub restaurants around the UK.

Fever-Tree, for instance, said that it had lowered its profit guidance in light of what it described as a “dramatic increase” in commodity prices since the beginning of the Russian invasion. However, chief executive Tim Warrillow did say that the long-term global opportunity for the business remained “substantial”.

Meanwhile, TRG said that the increasing cost of gas and electricity would add a further £6 million to £7 million to its expenses for 2022. The company said that it anticipated its costs would go up by over 5% this year, due to price increases in commodities and pressures on supply chains.

London Registrars can help your business to navigate the continuing uncertainty

Even at this stage of the conflict, much remains unclear about the full range of consequences likely to unfold for British firms in the months and years ahead. And of course, if you are a business owner, you are likely to be mindful of the limited scope you may have to mitigate against the effects of external events.

Nonetheless, there are likely to be certain steps that you can take to ensure the highest standards of governance and compliance within your organisation, and London Registrars can very much assist you with this aim.

To learn more about our full wealth of company secretarial and business support services ranging from directors’ service addresses and minute book maintenance to ensuring timely filings at Companies House, please do not hesitate to contact our team today.

March 2022

Government publishes review into cybersecurity incentives and regulation

In news that will interest many organisations benefitting from our expertise in company secretarial practice for private and public limited companies and other services, the UK Government has published a review setting out the progress made in enhancing cyber resilience in the country between 2016 and 2021 – and what steps need to be taken next.

What does the review look into?

The review, published on 19 January 2022, assesses how cyber resilience in the UK has improved since 2016. This includes consideration of the positive impact of recent legislation on the management of cyber risk, such as the UK GDPR, the Data Protection Act 2018 (DPA 2018) and the Network and Information Systems Regulations 2018 (SI 2018/506).

Also outlined in the review are further actions that the Government plans to take to ensure sufficient protection against cyber threats for businesses and organisations across the digital economy.

What conclusions did the review reach on cyber resilience in the UK?

The review concluded that the market had failed to improve its security practices at a rapid enough rate to keep pace with ongoing cyber threats and the impact of these threats on an ever-more connected society.

This supports the suggestions of previous reviews that there was “insufficient regulation to compel organisations to better manage cyber risks”, and that this in turn hindered companies from putting in place appropriate cyber risk processes.

The following are the key outcomes that the Government seeks to achieve:

  • understanding why government advice is not reaching or being acted upon by the target audience
  • boosting cyber resilience within organisations through higher uptake of the Cyber Essentials scheme
  • improving resilience within essential services and digital services
  • increasing accountability for cyber security in business
  • clarifying skills and qualifications within the cybersecurity profession

Coinciding with the publication of this review, the Government has also announced two new consultations for new laws to optimise the cyber resilience of organisations that are important to the UK economy, and the embedding of standards and career pathways across the cybersecurity profession.

Contact to us to find out more about our considerable know-how

Would you like to learn more about how our company secretarial practice for companies and related services for a wide range of organisations could benefit you in the coming months and years?

The team here at London Registrars is always available to talk about how we can help with the fulfilment of your company’s corporate governance, risk and compliance requirements. Simply contact us now via phone or email.

February 2022

What is the National Crime Agency doing to tackle money laundering?

We have previously written here on the London Registrars blog about the very genuine threat that continues to be posed by money laundering to the UK’s national security, prosperity and reputation around the world.

In that piece, we touched on how money laundering arises, why the UK’s openness to entrepreneurs and business owners comparative to many other jurisdictions can make it a particular target for money laundering, and the steps our team here at the London Registrars take to guard against illegal activity.

All of this, however, raises another important question: what is the UK’s lead agency against organised crime, cybercrime and economic crime – the National Crime Agency (NCA) – doing to address the country’s money-laundering risk?

Creating a “hostile environment” for would-be money launderers

The NCA has said that it aims to make the UK a “hostile environment” for money laundering through the implementation of the following measures:

  • the targeting of individuals involved in money laundering so that they can be prosecuted and convicted, and their methods disrupted
  • the recovery and confiscation of assets
  • the training of financial investigators from across law enforcement in the UK
  • putting in place barriers to the potential abuse of the UK financial system

The agency has stated that it proactively tackles illicit finance to deny the assets of politically-exposed persons (PEPs) and corrupt elites of a range of jurisdictions. It has also said that it is actively looking at how new legislative powers from the Criminal Finances Act could be used; it is possible to recover criminal assets with the help of Unexplained Wealth Orders (UWOs), and the NCA has made a “number” of applications for UWOs since the provisions came into force.

In addition, the NCA has said it has made multiple successful Account Freezing Orders (AFOs), as a means of freezing millions of pounds in accounts.

The ever-more international nature of finance – entailing the swift transferral of money and assets between jurisdictions, products and services – has led to the NCA working closely alongside domestic and international partners to address the threat of money laundering around the globe.

The agency has described private-sector engagement as “critical” to efforts to effectively tackle money laundering. To this end, the agency cooperates with major financial institutions to allow it to pinpoint and disrupt instances of money laundering in both the UK and other territories.

What else has the agency said about its anti-money-laundering activities?

The NCA has further commented about its measures against money laundering: “By identifying and arresting money launderers, we are able to disrupt further criminal activity, as well as making the UK a difficult environment for those who seek to use it to launder criminal finances.

“Working in partnership with other law enforcement and private sector organisations will help us support financial institutions’ own efforts, provide training and insight to help financial personnel to spot the signs of money laundering, and develop new ways to identify and arrest offenders.”

The agency further stated that the recovery and confiscation of criminal assets aided its efforts to prevent criminal networks from continuing their use of money laundering routes.

London Registrars can help your firm achieve the highest standards of governance and compliance

A complete range of company secretarial services is available from our team to ensure your organisation continues to meet its own legal, compliance and business obligations.

With our solutions encompassing registered office addresses, directors’ service addresses, minute-book maintenance, register of shareholders maintenance, and much more, we would be pleased to advise and assist if you do reach out to our skilled and experienced compliance professionals.

January 2022

What offences can a company and its directors commit under the Companies Act 2006?

The Companies Act 2006 is the legislation that forms the primary source of UK company law and dictates the corporate governance and compliance efforts of a wide range of UK organisations. It is therefore crucial for companies and their directors to be well informed on the offences that could inadvertently be committed under this Act.

Non-compliance with some of the Act’s provisions may create summary offences relating to comparatively minor defaults, usually involving failures to notify the Registrar of Companies of matters that impact on the company and its constitution, or to provide information to shareholders. Non-compliance with certain other provisions of the Act, however, may create serious crimes, mostly relating to fraud.

There is not always a clear distinction between these two categories, given the scope for minor irregularities and defaults to also frequently be associated with more serious crime. An example of this could be where the improper maintenance of accounts or records serves as a means of concealing fraudulent trading or unlawful dealings with directors.

Selections from the Companies Act 2006 schedule of offences

The list of offences that may be committed by a company and its directors under the Companies Act 2006 is a long one. These include, but are not limited to, under the category of ‘summary only’:

  • Failing to send the registrar a copy of amended articles
  • Failing to forward resolutions or agreements affecting the company’s constitution to the registrar
  • Failing to give the registrar notice of changes made to the company constitution by court order
  • The company amending its articles so that it ceases to be exempt from the requirement to have the word “limited” in its title
  • Failing to keep a register of members and their particulars
  • Failing to properly keep a register of directors containing requisite information

There are also certain offences in the schedule of offences that can come under the category of either ‘summary only’ or ‘trial on indictment’. Some examples of these include:

  • Failing to hold annual general meetings for a public company, or as required by the articles or the members in the case of a private company
  • Failing to prepare a strategic report
  • Failing to comply with the approval and signing of the directors’ report and accounts
  • Failing to send out copies of reports to those entitled to receive them

The fines and sentencing powers applicable under the Act

On summary conviction for offences committed under the Companies Act 2006 after 12 March 2015, an unlimited maximum fine applies. The maximum fine is also unlimited in instances of conviction on indictment. Furthermore, a court is required to impose a victim surcharge.

With regard to sentencing powers:

  • Section 78 of the Powers of Criminal Courts (Sentencing) Act (PCCASA 2000) specifies the maximum imprisonment powers: a magistrates’ court shall not have power to impose imprisonment exceeding six months in respect of any one offence
  • Also specifying the maximum powers of imprisonment is section 224(1) of the Sentencing Act 2020, which sets out that a magistrates’ court does not have power to impose imprisonment for more than six months in relation to any one offence
  • Paragraph 24 of Schedule 22 to the Sentencing Act 2020 amends section 224(1), substituting 12 months for six months
  • Section 1131 of the Companies Act 2006 deals with the transitional provision.

What about personal liability claims?

Finally, directors can also be at risk of any of a range of claims for personal liability arising from wrongdoing in their management of the company. Examples of such claims can include:

  • To the company for breach of the directors’ general duties under the Companies Act 2006 or for wrongful trading under the Insolvency Act 1986
  • To third parties, such as an investor for misrepresentation
  • To employees for discrimination under the Equality Act 2010
  • Under legislation that imposes personal liability on directors, such as health and safety legislation, environmental legislation, the Bribery Act 2010, the Corporate Manslaughter and Corporate Homicide Act 2007, and the Financial Services and Markets Act 2000
  • For costs incurred in the defence of civil, criminal or regulatory proceedings

Contact London Registrars for all-encompassing governance and compliance expertise

Are you on the lookout for a company that you can trust to bring your own firm the benefit of the best legal and business advice and corporate governance, risk and compliance solutions – ranging from directors’ service addresses to minute book maintenance?

If so, we would be delighted to have a more in-depth conversation with you about how we can help. Simply get in touch with us now, via email or phone, to learn more about our specialised services.

December 2021

How can workers build up and tap into their mental resilience?

With the first five days of November marking International Stress Awareness Week, now is as good a time as any to ask ourselves how well we are managing our mental health in the workplace.

Psychological wellbeing has always been crucial for helping workers to get the best out of their careers – but also remains a subject of great concern to many of us. This much is borne out by Mental Health Foundation research that has found a quarter of workers are affected at mental health issues at some point.

However, despite mental wellbeing having become an increasingly common buzzword – in and away from the workplace – significant numbers of us are still unaware of exactly what mental resilience is, and how we can harness it.

Explaining what mental resilience is – and what it isn’t

As workplace health expert Dr Wolfgang Seidl was recently quoted as saying in the Evening Standard: “Resilience is the ability to adapt and bounce back from difficult events, challenges, disappointments or adversity. It’s not about being strong or having a ‘stiff upper lip’.

“Your resilience level isn’t set in stone. It’s dynamic, and you can increase it.”

Employers have an important role to play in encouraging resilience among their staff

While, in the words of freelance Happiness Officer Danielle Woods, “the emotions we feel are ultimately a choice,” she added that the task of building resilience was not solely down to the individual, with employers also needing to take responsibility for the environment they create.

It is crucial, then, that organisations do not simply blame struggling employees for not doing enough to make themselves resilient, if there are aspects of the workplace that could be adjusted to help build resilience.

Research has indicated that less than half of employees would feel able to communicate to their line manager about suffering from stress – which underlines that there is still a very real sense of victim-blaming in some organisations.

So, how can you help boost resilience – in yourself and your employees?

Dr Seidl encourages a focus on the four Cs:

  • Commitment, including individuals setting goals and staying dedicated to them, as well as employers setting out specific and inspiring company values, and making them a reality
  • Control, so that staff feel trusted to manage their own workflow, instead of being micromanaged or remote-controlled
  • Challenge, or specifically, approaching challenges as opportunities. Employers and staff alike should aim to adopt flexible mindsets, with an openness to new approaches, instead of simply being of the view that “this is the way we have always done it”
  • Community. A sense of community has become harder to maintain for some firms, amid the strains of the last few years and the greater prevalence of remote working. However, it is still possible to cultivate “watercooler” moments even in today’s increasingly digital workplace, which in turn, can help ensure employees feel supported as part of a well-functioning and likeminded team.

We can provide your firm with invaluable specialised assistance

As corporate governance and compliance professionals here at London Registrars, we are well-placed to help your business manage the many challenges that may be posed to its back-office processes at this time of recovery for many UK firms.

For a more detailed conversation about solutions of ours ranging from registered office addresses and directors’ service addresses to the preparation and submission of your annual Confirmation Statement and register of shareholders maintenance, please feel free to contact us on 020 7608 0011.

November 2021

Is now the time to return to “working from home”?

With the UK Government having encouraged people in England to return to the office since July, many observers have been wondering whether this advice could change in the event of a surge in COVID-19 cases over the winter.

Across the rest of the UK, staff are still being encouraged to work from home where possible. So, amid worries about the current coronavirus case numbers, could now be the right moment for England to follow suit?

What is the present advice in England, and what changes could happen?

Since the easing of most restrictions on social contact in England on 19 July, people have not been asked by the Government to work from home. Furthermore, in his recent Conservative Party conference speech, Prime Minister Boris Johnson suggested that coming back to the office was key to making workforces more productive.

However, while workers are no longer subject to social distancing limits, businesses are still legally obliged to manage the risks that staff and customers face. They are required to comply with the UK Government’s official guidance on safe working practices during the pandemic, and to undertake COVID risk assessments. Some businesses are also keeping in place longstanding measures for managing the risks, such as one-way systems and enhanced cleaning routines.

Firms across England are also still widely carrying out regular lateral flow testing. More in-depth advice is available for particular industries, such as hospitality, manufacturing and construction.

However, the Government has also prepared an Autumn and Winter Plan for dealing with COVID-19 over the coming months. Contained within this are two proposals: Plan A and Plan B, with the first of these focused on the vaccine rollout, including booster jabs for the over 50s, health workers and the most vulnerable, as well as single jabs for children aged between 12 and 15. Those who have not yet been vaccinated are also still being encouraged to come forward.

In the event of the NHS being put under unacceptable strain, however, Plan B – or elements of it – could be put into motion. This may include advice that staff go back to working from home for a “limited period”.

How effective is home working in minimising the spread of COVID-19?

The Government’s Scientific Advisory Group for Emergencies (Sage) has stated that working from home is one of the most effective ways to reduce social contacts, and has a “strong impact” against transmission of the virus.

By working remotely, employees can greatly decrease the level of face-to-face contact they have with colleagues and other people they may encounter during the typical working day, such as fellow commuters on public transport.

Sir Patrick Vallance, the Government’s Chief Scientific Adviser, has said that the reintroduction of restrictions may be needed if there is a steep increase in COVID-19 cases.

Can I request the right to continue working from home?

While employees are entitled to ask their employer to be permitted to work from home, employers are not required to agree to such a request, even for workers who have operated from home throughout the pandemic.

However, the Chartered Institute for Professional Development (CIPD), which represents HR professionals, anticipates that in future, staff will be given far greater freedom and flexibility with regard to how, when and where they work.

The professional association has stated that “it should be down to individual organisations, consulting with their people, to agree working arrangements.”

A consultation has been launched by the Government on making flexible working the default option for all personnel from their first day in a job. Staff presently face a six-month wait before they have the right to ask for a flexible working arrangement. The Government will also look into the present process, and consider whether employers wishing to turn down a flexible working request should be required to propose alternatives.

We can help guide your organisation through the ups and downs of the winter

Whatever challenges your business looks likely to face during the colder and darker months of the year – including in relation to the coronavirus – London Registrars stands ready and waiting to assist with specialised and informed corporate governance, risk and compliance services.

To learn more about how our company secretarial subscriptions and related solutions can help relieve your business of significant burdens this autumn and winter, please do not hesitate to contact our professionals by phone or email.

October 2021

Service of documents between the UK and the EU after Brexit

So crowded has the general news agenda been in relation to other issues since the beginning of 2021, that it might seem hard to believe the UK really has been experiencing the implications of Brexit ‘proper’ for less than a year.

With the Brexit transition period having come to a close at the end of 2020, this has made a significant difference to the wide range of procedural rules to be followed by litigators and those drafting commercial contracts.

Just one of these key areas relates to the receipt and service of documents and the appointment of a UK process agent on the conclusion of any contracts based on UK jurisdiction, where one of the parties is based overseas so that the UK process agent can receive such documents on behalf of the party based in another territory.

Service of documents prior to Brexit

During its time as an EU member state, the UK was subject to the EC Regulation 1393/2007 on the service in EU countries of judicial and extrajudicial documents in civil or commercial matters. Also known as the Service Regulation, this regulation sought to put in place a standardised and efficient procedure for the service of documents between parties in different EU member states.

The regulation works as follows: each member state designates transmitting and receiving agencies, with the transmitting agency in one country sending the documents to the receiving agency in another state, and the receiving agency then being responsible for service. Member states are also allowed to use registered post to serve directly on a party in another member state.

How has the situation now changed in the UK?

With the aforementioned Service Regulation no longer applying to the UK since January 2021, this country has instead become subject to the Hague Convention of 15 November 1965 on the service abroad of judicial and extrajudicial documents in civil and commercial matters.

This instrument was already applicable to the service of documents between the UK and Denmark and the countries making up the European Free Trade Association (EFTA) – except Lichtenstein – as well as between the UK and the United States and various other countries.

Fortunately, all 27 member states of the EU are signatories to this convention. It therefore won’t be necessary to consider whether an instrument other than the convention applies, regardless of the specific EU member state that one is dealing with.

On the negative side, however, all 27 EU member states have also made reservations and declarations about the convention. This makes it necessary to take a closer look at the rules in place in the relevant country.

In practice, there might not be a great difference to the means of service under the Hague Convention, compared to the arrangements that previously applied. There is a need for contracting states to designate a central authority, to which requests for service can be addressed. This authority is then responsible for arranging for service, in line with its country’s national laws. The Hague Convention also allows for service by mail, although this isn’t permitted by some contracting countries.

What are the real-world implications of this change?

The biggest difference under the new arrangements is likely to be how much time it takes for documents to be served. While it was expected under the Service Regulation that receiving agencies would serve documents with a month of receipt, there isn’t any similar provision in the Hague Convention. This raises the prospect that in some instances there could be delays of several months.

A good practical step, then, if your organisation is entering a new contract with an EU-based counterparty, would be to include a  process agent clause in the contract, setting out who has authority to accept service on behalf of the counterparty. This could be a UK process agent which in turn could greatly help minimise time and cost, in the event that proceedings later need to be issued.

Distinguishing between a process server and a process agent

A process server is instructed by one party in a contract to serve documents onto the counterparty, and the appointment of a process server is made at the time there is a need for such action.  The process agent (also known as an agent for service), on the other hand,  will not serve any documents on any other party. For instance, here at London Registrars, the first part of our function as process agent is the opposite: to have documents served on us, on behalf of our various appointor clients based outside of the UK, with whom we previously entered into a process agency contract.

In other words, we are effectively serving as such a client’s UK office in order to receive service of documents which, once they have been served on us, we will simply forward to our client to complete the second part of our function as their UK process agent.

For us to accept service of any documents, there must be a current process agency agreement in place between ourselves and the appointor. Any other documents outside such an arrangement would have no relevance to us or our function as a process agent.

Would you like to learn more about our cost-effective process agent service if you are an overseas firm dealing with UK-based suppliers or tenders? If so, please do not hesitate to reach out to the London Registrars team for further advice, guidance and information.

October 2021

What is the current regulatory state of play for the circular economy in the UK and the EU?

In a recent blog post here at London Registrars, we took a closer look at the increasing pertinence of the circular economy and the associated importance for all manner of organisations of adopting and embracing circular models.

What we did not specifically address in that blog post, however, was the emerging regulation on this issue in both the UK and the European Union (EU).

Environmental regulations that are relevant to companies’ aspirations towards circularity are becoming broader based and more prominent, and it is crucial for affected businesses to keep up to date with the latest changes.

The regulatory and legal picture that today’s firms must be aware of

One important aspect to consider for businesses looking to adopt circular models is the competition implications potentially arising from certain initiatives and collaborations. Even if the intention is to promote sustainability, any agreements that restrict competition, or practices that represent an abuse of a dominant position, could be scrutinised from a competition perspective.

With regard to the present situation in the EU, the European Green Deal outlines the bloc’s strategy to transform its economy while achieving net-zero carbon emissions.

The EU’s first circular economic strategy, launched in 2015, saw the introduction of four waste directives. In March 2020, the EU introduced its new circular economy action plan, which is a key part of the Green Deal package. Various measures are planned, including renewed action on waste as well as a consumer right to repair. It is thought that further initiatives will be announced in such sectors as plastics, packaging and textiles.

As for the UK, the Government and the devolved administrations released a joint policy statement in July 2020 reiterating that the UK was committed to making a circular economy a reality. Existing EU environmental legislation was retained into UK law when the Brexit transition period concluded, but the UK is not obliged to implement further EU circular economy legislative measures brought in since 1 January 2021.

At the time of writing, the Environment Bill – with measures including the extension of producer responsibility schemes – was making its way through Parliament, reaching the stage of a third reading in the House of Lords.

Our corporate governance expertise can help guide your firm through the new era

With much focus turning to the concrete means by which a truly circular economy can be achieved across the UK and the EU, your organisation is also likely to appreciate expert and informed assistance on all manner of aspects of its corporate governance, risk management and compliance.

Our knowhow in the best company secretarial practice for PLCs and other organisations leaves us well-placed to serve these needs that your firm may have. Enquire to our team today, and we will be pleased to outline how we could assist you in 2021 and beyond.

September 2021