Unit 4 Admin Flashcards
Post decision requirements - filing at companies house
Must notify the Registrar of Companies when certain decisions are made. Penalty in the CA 2006 is a fine for the company and all of its officers.
Companies House has produced forms which companies must fill in and send to the Registrar of Companies, and these will suffice as notification to the Registrar of Companies.
Copies of all special resolutions must be filed at Companies House (s 29 and s 30 CA 2006). Some ordinary resolutions must also be filed.
Post decision requirements - internal administration
Companies must keep up to date - the register of members and register of directors.
The registers (known as statutory books) can be kept at the company’s registered office or a Single Alternative Inspection Location (SAIL). Or can elect to keep these records on central register at companies house.
A SAIL address is notified to Companies House on form AD02, while movement of company records to the SAIL address is notified on form AD03. A form AD04 is used to notify Companies House of company records moving from the SAIL address back to the registered office.
Must keep board minutes and minutes of every general meeting. These must be kept along with outcome of any written resolutions at registered office or SAIL for 10 years.
Companies annual responsibilities
- Every company must keep adequate accounting records. Failure to do so is an offence under s 387 CA 2006.
- It is the directors’ responsibility to ensure that accounts are produced for each financial year (s 394 CA 2006).
- The accounts must give a true and fair view of the state of affairs at the company as at the end of the financial year.
- The directors of every company (apart from private companies classed as a small company or micro- entity) must prepare a directors’ report for each financial year to accompany the accounts.
- ‘Small company = balance sheet total of not more than £5.1 million, a turnover of not more than £10.2 million, and no more than 50 employees in a particular financial year.
- Micro- entity = balance sheet total of not more than £316,000, a turnover of not more than £632,000, and no more than ten employees in a particular financial year/
- Directors’ responsibility to circulate the accounts, directors’ report and, if required, an auditor’s report to every shareholder and debenture holder, and anyone else who is entitled to receive notice of general meetings.
- Every company must file its accounts and, unless it is a small company or micro- entity, the directors’ report, for each financial year at Companies House
- The time limit for filing is 9 months from the end of the accounting reference period for a private company and 6 months from the end of the accounting reference period for a public company.
- Newly incorporated companies have the option of filing the accounts and report 3 months after the end of the company’s first accounting reference period instead.
- Every company must file a confirmation statement, on form CS01, within 14 days from the company’s confirmation date, which is the anniversary of its incorporation.
The company’s officers - company secretary
Private companies are not required to have a company secretary but public limited companies must have one.
Deal with legal admin requirements.
Can be corporate body acting through a human.
Can have more than one and will act jointly.
In companies without a company secretary, if the CA 2006 requires a company secretary to do something, it can be performed either by the directors or someone authorised by them.
Usually have apparent authority to enter into admin contracts but not trading contracts e.g. borrowing money.
First secretary named on IN01. After appointed by board resolution. Directors use their power under MA3 to appoint to something added to articles.
The company’s officers - company secretary - removal from office
Can resign or can be removed by board resolution.
Sometimes written contract setting out consequences e.g. compensation, employment law claims.
CA 2006 requirements:
* Notify the Registrar of Companies on form AP03 (for a human secretary) or AP04 (for a corporate secretary) within 14 days of the appointment of a company secretary.
* Every company that has a company secretary must keep a register of secretaries with certain specified particulars.
* Private companies can elect not to keep their own register of secretaries, and instead ensure that the information is filed and kept up- to- date on the central register for the company at Companies House.
* When a company secretary resigns or is removed from office, the company must notify the Registrar of Companies within 14 days of their resignation or removal, on form TM02. The register of secretaries will need to be amended.
* Notify the Registrar of Companies within 14 days of any change in particulars of the company secretary kept in the register of secretaries, on form CH03 (for a human secretary) and form CH04 (for a corporate secretary). Again, the register of secretaries will need to be amended.
The company’s officers - the auditor
An accountant whose main duty is to prepare a report on the company’s annual accounts, to be sent to its shareholder.
The auditor’s report must state whether, in the auditor’s opinion, the accounts have been prepared properly and give a true and fair view of the company (s 495(3) CA 2006).
Small companies are exempt from the statutory audit requirements (s 477 CA 2006). Companies which do not trade, known as dormant companies, are also permitted to file abbreviated accounts and are exempt from audit (s 480 CA 2006).
If the company must have an auditor, the auditor must be someone who is qualified, that is, a certified or chartered accountant, and independent, that is, not connected with anyone involved in the company.
The company’s officers - the auditor - appointment
Directors of a private company usually appoint the company’s first auditor, and after that the shareholders also have the power to appoint the auditor, by ordinary resolution.
An auditor of a private company is usually deemed to be reappointed automatically each year (s 487). The exceptions to this are set out in s 487 and include a situation where the auditor was appointed by the directors, as the first auditor will have been, or when the company’s articles of association require the auditors to be reappointed every year.
The company’s officers - the auditor - liability
Case law has established that auditors do not owe a duty of care either to the shareholders or to potential new shareholders when conducting their annual audit.
For liability to be imposed, there would also have to be proximity between the relevant parties.
Auditors can be sued for negligence by the company they are auditing.
There are two criminal offences relating to auditors under s 507 CA 2006.
1. knowingly or recklessly including misleading, false or deceptive material in the auditor’s report.
2. omitting certain statements from the report which are required to be included by the CA 2006.
The company’s officers - the auditor - removal
The shareholders can remove the auditor from office at any time by ordinary resolution.
The shareholders must give special notice to the company of the proposal to remove the auditor.
The auditor can resign at any time by notice in writing sent to the company’s registered office.
Whenever an auditor ceases to hold office, whether as a result of removal or resignation, they must deliver a statement to the company explaining the circumstances connected with ceasing to hold office.
Share certificates
All shareholders have the right to receive a share certificate = evidence of the holder’s title to the shares.
Companies must issue share certificates within two months of the allotment of shares or within two months of a transfer of shares being lodged with the company.
The PSC register - forms
Shareholders who own more than 25% of shares or controls more than 25% of voting rights.
Common forms:
* Form PSC01 must be completed by any individual who is to appear on the PSC register for the first time.
* Form PSC02 must be completed by any relevant legal entity who is to appear on the PSC register for the first time.
* Any shareholder who already appears on the PSC register but whose details change must complete form PSC04, and any relevant legal entity who already appears on the PSC register but whose details change must complete form PSC05.
* Anyone ceasing to be a person with significant control must complete form PSC07.
The deadline for filing the forms is 14 days from the date the company made the change in its PSC register.
