Just before Christmas, the Government finally issued a response to its 2009 consultation on proposals to simplify the requirements relating to financial information included in statements of capital required by the Companies Act 2006. Although the Government agrees that there is a good case for making changes to the information to be provided, more straightforward Companies House forms are unlikely to be in use before autumn 2011.
Statements of capital were a new concept introduced by the Companies Act 2006 in October 2009. They set out a snapshot of information about a company's share capital at a particular point in time and comprise financial information about the shares, as well as details about certain of the rights attaching to them. The statements are set out in Companies House forms and have to be filed with the Registrar of Companies on formation, with the company's Annual Return and following any alteration of share capital.
Although the objectives of the recent reform of companies legislation included ensuring better regulation and making it easier to set up and run a company, anyone who has been called upon to complete a statement of capital will know that their introduction has caused one or two headaches. If a company has a complicated share issuing history or if its share rights are complex, trying to complete the relevant boxes on the Companies House forms can be a tricky exercise.
The Government's announcement that statements of capital are to be made more straightforward is to be welcomed. It is proposing that the Annual Return statement of capital will be altered to include only the following information:
- the total number of shares of the company and their aggregate nominal value; and
- the total number of shares of each class and their aggregate nominal value.
The requirements for information about voting rights and the amounts paid/unpaid on shares will be abolished altogether. It expects to be able to make these changes to the Annual Return from October 2011 and will consult on draft regulations in due course.
The timing in relation to changes to statements of capital required in other circumstances, such as on an allotment of shares, is less clear as the Government says that detailed proposals will be published only when a suitable legislative vehicle is available.
The Government's response to the consultation is available here.