News and Insights

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Corporate Governance Code 2018

The Financial Reporting Council (FRC) published the 2018 Corporate Governance Code (the “new Code”) on 16 July 2018 with the aim of improving the standard of reporting by companies and strengthen the integrity of UK business – a necessity after the recent collapse of Carillion and the BHS pension scandal.

The new Code encourages more meaningful reporting and focuses on board effectiveness, stakeholder engagement, purpose and culture. It applies only to those UK companies with a premium listing on the London Stock Exchange and these companies are expected to begin complying with the new Code on or after 1 January 2019. The new Code calls on boards to analyse their company’s culture from within and requires them to respond to any matters relating to corporate governance using the ‘comply or explain’ principle.

Under the new Code, a company’s board are required to engage more with their workforce to ensure that they share the same values and that practices are in line with the company’s long-term aims. The workforce should also be able raise any concerns they may have. No guidance is provided on how companies should go about this but a company could, for example, appoint a non-executive director from the workforce as a representative who could communicate any issues.

Another area of the Code to have been amended concerns the division of responsibility. The new Code now includes the requirement that the board receive accurate and timely information. Non-executive directors must also be given sufficient time to meet their board responsibilities.

An additional key feature of the new Code is that it now requires the board to annually evaluate its composition, diversity and how they all co-operate with one another. For example boards will be required to explain in cases where the chairperson’s tenure exceeds nine years.

Reporting on and structuring of remuneration policies has also changed. Policies should now be designed to support strategy and promote the long term success of the company, be more transparent and less performance focused.

The FRC does not currently have the power to penalise companies or board members who violate the Code. A government review of the FRC’s effectiveness will be published at the end of the year so watch this space. Hopefully these changes will motivate boards to engage more with their employees and shareholders, improve diversity and ultimately boost public confidence in UK businesses.

 

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Confirmation Statements

The confirmation statement, formally the annual return, was introduced from 30 June 2017 and is an annual filing obligation for UK companies and LLPs. The purpose of the confirmation statement is to ensure that the information held by Companies House about your company is up to date.

It is the company’s responsibility to ensure that the information held about it on the public record is correct. If you have not previously notified Companies House about any changes that have taken place during the year, the confirmation statement is the perfect opportunity to submit this information.

When you file your company’s confirmation statement, begin by checking what information was given in last year’s confirmation statement and also what is held at Companies House. This is a great opportunity for you to ensure that all the information held about your company is up to date.

Remember to check all the important details such as the registered office address, location of the statutory records if they are not held at the registered office, your company’s standard industrial classification codes, details for the directors and secretary and the share capital, shareholder information, any transfers that took place during the year and your Company’s PSC information.

You will need to be careful as some changes need to be reported alongside the confirmation statement. Other forms may need to be filed at the same time as the confirmation statement if some changes have not yet been reported to Companies House.

If you note any changes to your company’s share structure you will need to update the information contained in this year’s confirmation statement before submitting it to Companies House.

The confirmation date is the date at which the information contained in the confirmation statement is correct and the next confirmation date falls 12 months after the last confirmation. The confirmation can be delivered on paper or filed electronically upon payment of a fee.

For help with your company’s confirmation statement or queries about annual compliance, contact M & N Group so we can help you remain compliant with our fast and efficient service.

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You’ve got a business idea but what are the next steps?

  • Choose your company structure

With several types of companies to choose from, you will need to select the best suited for your business and review the information that must be lodged at Companies House.
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Say Goodbye to Corporate Directors!

As part of the Government’s drive to encourage transparency, a ban on the use of corporate directors will come into force later this year as part of The Small Business. Enterprise and Employment Act 2015.

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What is an SPV?

What is an SPV?

A Special Purpose Vehicle (SPV) is a UK-incorporated company that has been established by another trading company or private individuals for the sole purpose of Buy-To-Let activities i.e. the purchase/remortgage of residential properties for letting.
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