Bruce Wallace Associates London
Bruce Wallace Associates London

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May 2021

6 May, 2021

Q: Who should I include on my PSC register?

A: Part 21A and Schedule 1A to the Companies Act 2006 came into force on 6 April 2016 to increase transparency over who ultimately owns and controls UK companies. Accordingly, all UK companies and limited liability partnerships (LLPs), and UK Societates falling within Part 21A CA 2006 should now be maintaining a register of people with significant control (PSC Register) and continue to take reasonable steps to identify its PSCs or registrable relevant legal entities (RLEs). If there are no registrable PSCs or RLEs, a statement must be made and filed with Companies House. The PSC Register must never be blank. Changes to the PSC Register must be recorded within 14 days and notified to Companies House by filing Form PSC04 (PSC) and/or Form PSC05 (RLE) within a further 14 days.

A PSC is by definition an individual or RLE who meet at least one or more of the following conditions in relation to a company:

Condition 1 – holds, directly or indirectly, more than 25% (in nominal value) of the share capital of the company.

Condition 2 – holds, directly or indirectly, more than 25% of the voting rights in the company.

Condition 3 – holds the right, directly or indirectly, to appoint or remove a majority of the board of directors of the company.

Condition 4 – has the right to exercise, or actually exercises, significant influence or control over the company.

Condition 5 – has the right to exercise, or actually exercises, significant influence or control over the activities of a trust or firm (that is not a legal entity) which would itself satisfy any of Conditions 1 to 4 in relation to the company if it were an individual.

You can find the full guidance for PSC at

https://www.gov.uk/government/publications/guidance-to-the-people-with-significant-control-requirements-for-companies-and-limited-liability-partnerships

If you need any help with your CH filing obligations or with any of your compliance or governance policies generally, please contact us. All our contact details are on our website www.brucewallace.co.uk

March 2021

19 March, 2021

Q. We have just been informed our 2019 accounts are incorrect. As these accounts have been filed at Companies House and sent out to members, what can we do to rectify this?

A. The directors of the company may prepare revised annual accounts if the original version did not comply with the requirements of the Companies Act 2006 (CA 2006) section 454(1). As copies of the original accounts have been sent to members and delivered to the Registrar, the revisions must be confined to the correction of those respects in which the original accounts or reports did not comply; and the making of any necessary consequential amendments (CA 2006 s454(2)).

The Companies (Revision of Defective Accounts and Reports) Regulations 2008 (SI 2008/373) and the Companies (Revision of Defective Accounts and Reports) (Amendment) (No.2) Regulations 2013 (SI 2013/2224) allow the directors of the company to correct the original defective accounts and reports by either replacing the accounts and reports in substitution for the originals or by a supplementary note indicating the corrections to be made to the originals. The regulations set out how the revised accounts are to be prepared and give details of the procedures to be adopted for approval and signing of the revised accounts and reports.

The original defective accounts will remain on the public record, therefore any revised accounts submitted to Companies House must be clearly marked as "Amended" on the front page. The revised accounts must be for the same period as the original accounts, must clearly state that they replace the original accounts and are now the statutory accounts and must be prepared as they were at the date of the original accounts. If only one part of the accounts is to be amended, there must be a note signed by a director and filed with a copy of the original accounts which states what has been changed.

If you need any further information or help with your accounts or any other company secretarial matters, please contact us. All our contact details are on our website www.brucewallace.co.uk.

February 2021

8 February, 2021

Q: Our Board needs to have more regular oversight of ESG matters across the Company. What factors should we be considering in order to initiate this?

A: Given the breadth of issues involved, Environmental, Social and Governance (ESG) matters should not be viewed as a separate topic on the board agenda but rather consideration of these factors should be embedded across the organisation. Firstly, the Board should understand why consideration of these matters is important, not just in terms of existing and potential investors, but ensuring the business operates in a sustainable manner alongside achieving strong financial returns. Keeping the Board updated on how ESG matters are progressing across a business can be a challenge, so it may be helpful to follow a short step plan to address the issues involved:

  • Environmental: Has the Company determined what factors it needs to report on regarding its environmental impact? The FRC is encouraging companies to report against the TCFD framework, however whilst not yet mandatory for all companies, there may be alternative frameworks and measures that are more appropriate. Involving the Board on this decision would be helpful and ensure there is clarity on the ongoing information to be provided.
  • Social: Have all of the Company’s stakeholder groups, such as its suppliers, workforce, shareholders, customers and the communities it operates within, all been identified? Is the Board aware of what two-way engagement has taken place between the Company and its stakeholders? Has consideration been given to these groups and /or input been received, to help inform the decisions before the Board?Deliberating these questions at the Board as part of strategic discussions on ESG, would in turn aid future oversight.
  • Governance: Whilst the Board will continue to evolve its governance structures, and could form a relevant Committee or give responsibilities to individual Non-Executives, giving thought as to how ESG matters feed into key decisions is crucial in ensuring these are continually considered.

If you need any further information or help with your reporting requirements, please contact us. All our contact details are on our website www.brucewallace.co.uk.

1 January, 1970

January 2021

19 January, 2021

Q: We have been holding virtual board meetings over the last few months. Is there anything we need to consider as we continue to hold board meetings in this way?

A: Many companies had to quickly adapt last year to holding virtual board meetings. The way board meetings were conducted to deal with the challenges presented by Covid-19, and the way they must continue to be run over the coming months, it is worth ensuring there is a robust plan in place for the board to continue to meet on this basis.

Whilst the Companies Act 2006 generally allows e-communications, the articles should be checked for any provisions on telephone or video conferencing. The Model Articles allow directors’ meetings to be held remotely using video, telephone or other electronic means, however even if the Articles are not explicit on allowing board meeting electronically, it is generally deemed that the meetings will be legally effective.

The Company’s articles should also be reviewed for other practical issues such as the quorum requirements for board meetings, the appointment of alternate director and short notice as deemed appropriate etc. For any companies with overseas entities in the UK, there may be tax implications for companies that are no longer meeting in person and specialist advice on possible exemptions should be sought.

Given the speed with which companies had to adapt to holding virtual meetings, it also may be worth taking into consideration if any improvements can be made, to the meeting process. Boards should consider whether the frequency, length, format, and security arrangements for meetings remain fit for purpose for ongoing virtual meetings.

The Chartered Governance Institute (ICSA) has published a guidance note about virtual board meetings. Key points covered in the guidance are as follows:

  • Choosing the right technology and communication channel
  • Structuring virtual meetings and avoiding complexity
  • The value of preparation
  • Establishing ground rules for the meeting
  • Clear instructions on accessing the meeting
  • The necessity for good boardroom practices
  • Alternatives to meetings, such as written resolutions, delegation to a committee or subsequent ratification.

good-practice-for-virtual-board-and-committee-meetings-web1-002(1).pdf (icsa.org.uk)

If you need any help with managing board meetings generally, please contact us. All our contact details are on our website www.brucewallace.co.uk.

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Martha Bruce

martha@brucewallace.co.uk

Susan Wallace

susan@brucewallace.co.uk

Chloe Higgins

chloe@brucewallace.co.uk

Adrienne Graham

Adrienne@brucewallace.co.uk

Anne-Marie Palmer

anne-marie@brucewallace.co.uk

Registered office:
118 Pall Mall
London
SW1Y 5ED.

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