We have previously reported on the government's "Red Tape Challenge", which gives members of the public the opportunity to comment on regulations which they feel are unduly burdensome. The government will then consider whether to remove, amend or merge any regulation in line with comments from the public.
Although it is possible to comment on any regulation identified for review at any point during the two-year project, the current focus of the Red Tape Challenge is on company law regulation. This spotlight on company regulation runs for three weeks from 26 January until 16 February, with the government planning to publish the results of its review later this year.
The government is inviting comments on four categories of company law:
- accounts and returns;
- disclosing information about your business;
- business names; and
- the workings of companies and partnerships.
For each of these four categories, the government is inviting comments in particular on:
- whether regulations can be simplified or removed from the statute book;
- whether a regulation's purpose could be achieved by non-regulatory methods (for example, a voluntary code);
- whether bureaucracy caused by a regulation could be reduced by better implementation; and
- any views on how to make enforcement of regulations less burdensome.
The government's aim for this review is to find a balance between providing companies with the flexibility they require to run their business effectively, and requiring them to provide sufficient information to protect creditors and customers. Should you wish to comment, the company and commercial law part of the Red Tape Challenge website is here.
It is difficult to assess what the impact of the review will be. However, it does seem to be a genuine effort to find a way of reducing the burden on companies, particularly smaller ones, and the plan to remove or amend over 160 retail regulations as a result of the recent spotlight on that industry suggests that such reviews can bring about reform.
The Red Tape Challenge, and in particular, the current focus on the regulation of companies is perhaps best viewed as a part of the bigger reform of the company law regime, starting with the implementation of the Companies Act 2006. The government has a number of other reviews underway in addition to the Red Tape Challenge (for example consultations on exemptions from mandatory audit and changes to the registration of company charges), which, taken as whole, suggests a trend towards a lower administrative burden, for smaller companies at least.