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Covid-19: Company secretarial changes

9th June 2020

Covid-19: Company secretarial changes

The Government has recently introduced the Corporate Governance and Insolvency Bill ("Bill") in Parliament, which will implement measures to amend insolvency and company law to support businesses impacted by coronavirus.

Amongst other things, the Bill aims to temporarily ease burdens on businesses by enabling them to hold closed Annual General Meetings ("AGMs"), conduct business and communicate with members electronically, and by extending filing deadlines.  The expectation is that this will allow businesses to focus their resources on continuing operations.

Virtual AGMs

Companies which are required to hold an AGM or a general meeting by virtue of legislation or their articles of association may now hold a meeting by other electronic means; even if their articles of association expressly disallow it.

Any company that was, since 26 March, required to hold an AGM and has already had held it in a way that did not meet the requirements of their articles of association, will be deemed to have done so in accordance with the law.  In this respect the new relief for company meetings is retrospective.

Shareholders will still be able to exercise their right to vote on resolutions.  However, they may be prevented from voting in person.

Any company that has postponed an AGM which was due to be held after 26 March, will be given another opportunity to do so within a given a limited period after the Bill is passed.

Extension of filings

The Bill may also introduce extended deadlines for the following:

  • Accounts;
  • confirmation statements;
  • registration of charges; and
  • event-driven filings, such as a change to the company’s officers or people with significant control.

Directors of companies hold various legal duties and responsibilities in the delivering of certain information to Companies House, and failing to file this information by the relevant deadline can result in the company paying a late filing penalty or the directors being prosecuted.  Companies House state that a “failure to meet statutory deadlines can have broader impacts on a company’s record or credit rating”.  The Bill aims to provide relief for these filing obligations to avoid these adverse consequences.

The Bill was introduced on 20 May.  Companies House state that many of the measures in the Bill will need secondary legislation before they come into force, and this will be introduced in due course.

Note that companies may already apply for a three-month extension for filing their accounts, and those citing issues around covid-19 will be automatically and immediately granted an extension if the relevant application is made before the date on which the accounts are due to be filed.

If you would like to discuss any of these issues in more detail, you can contact Richard Freeman on 01384 327253 or richard.freeman@higgsandsons.co.uk or David Ellis on 07515 999503 or david.ellis@higgsandsons.co.uk

If you have any other general queries or concerns that you feel we can assist with then please email supportingyou@higgsandsons.co.uk and somebody will get back to you as a matter of urgency.

 

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