Authorised Share Capital - Has It Really Been Abolished in the Companies Act 2006?

Authorised Share Capital - has it really been abolished?

The Companies Act 2006 added in a full-size exchange to proportion capital with effect from 1 October 2009. Companies integrated from this date onwards now not ought to kingdom their 'approved capital' additionally referred to as 'nominal capital'. The time period 'nominal' become extra accurate. A private agency ought to, for instance, have an authorised capital of £a million but difficulty simply one share and therefore have real capital of simply £1. A agency's capital now's primarily based totally on issued shares so there's no chance of confusion bobbing up from inflated nominal amounts.

Authorised capital still needs to be considered however in two conditions:

a) for agencies integrated earlier than 1/10/09 - the authorized capital figure in the memorandum of affiliation will in impact be a ceiling on what the administrators can issue. If a agency desires to allot further shares, it wishes to delete the relevant clause or amend it.

B) for public companies or a private agency with a couple of class of stocks, the directors must be accredited by means of the enterprise. The authorisation, which may be in the articles, has to country the most amount of stocks that can be allocated and a date, within 5 years, on which the authority will expire.

Please word that the Model Articles for non-public businesses most effective envisage a enterprise having one class of shares and wonderful care should be taken when authorising the administrators to allot stocks. Also, whenever a employer adjustments its proportion capital, it should document a Statement of Capital at Companies House.

Sole Corporate Directors - No longer legal within the UK

From 1 October 2010 onwards all corporations should have at least one natural director. Section one hundred fifty five of the Companies Act 2006 which came into impact on 1 October 2008, granted a  12 months duration of grace to organizations already integrated with a sole company director at that point. Any organizations with a sole corporate director after the closing date will face consequences that could include fines of up to £5000 plus every day default penalties.

Late Filing Penalties

In the month of April 2010, Companies House imposed overdue filing consequences of a outstanding £nine,227,000. This continues the sample of ultimate 12 months which shows that over 20,000 corporations are submitting their debts late every month. Given the vast size of penalties these days, it is surprising that more businesses are not submitting their accounts inside the 9 month (or 6 month for public corporations) time restriction.

Penalties on private companies are as follows (Public groups penalties are better):

• Not extra than 1 month overdue - £150

• More than 1 month however not greater than three months - £375

• More than 3 months however no longer extra than 6 months - £750

• More than 6 months - £1,500

We urge all customers to ensure they prepare their bills well. The duty lies with the administrators, and consequences are not excused if the fault lies with their accountant. It additionally makes no difference if the corporation trades or now not, so dormant corporations must ensure they document a non-trading balance sheet.

Neil Dolby

Director, Stanley Davis Group Limited