The implementation of the Companies Act 2006 was lengthy, starting in January 2007 and ending in October this year.
The changes affect all companies registered in the UK and, with the Act being the longest piece of legislation ever passed by Parliament, the changes are vast. As most reporting implications come into effect in the next set of accounts for many companies, it’s worth going over some key changes.
For accounting periods commencing on or after April 6, 2008, the period to file accounts has reduced from seven to six months for a public company and from 10 to nine months for a private company.
Thresholds for small and medium-sized companies and groups have increased, affecting a company’s requirement for an audit and the type of accounts it produces. A massive implication for medium-sized groups is that they are no longer exempt from preparing consolidated accounts.
Small companies are audit-exempt if their turnover is less than £6.5m and their gross assets do not exceed £3.26m. Small public companies are not entitled to this exemption. A medium-sized company is defined as having a turnover of no more than £25.9m and gross assets of no more than £12.9m.
From October 1, directors have been required to provide Companies House with their residential address and a service address. The latter will be on public record but the residential address will be protected.
The above covers only a few changes in the Act and it is important that other potential implications and benefits are discussed with the company’s accountants – a much better option than trawling through the longest piece of legislation in English history.
- Natasha Frangos is a partner at accountancy and tax advice firm Haysmacintyre