Coronavirus and Company Secretarial Responsibilities

The impact of coronavirus continues to be felt in many ways by UK businesses, with advice and support from their professional advisers becoming more important than ever.

Companies House has suspended ‘same day’ applications to form new companies and change an existing company’s name. The same day service on orders for certificates of good standing and other documents is also temporarily unavailable. (We have therefore disabled all same day applications via our website and in the Inform Direct application.)

Companies House is also currently unable to offer a document ordering service for DVD-ROM/Archived documents/Hard Files or for older documents which are not shown in Companies House Direct.

Businesses are able to apply for a three month extension on filing their accounts, which will automatically be granted upon application without a need to provide evidence.

We’ve written separately in more detail about the process of applying for the three month extension on filing company accounts.

It’s important to remember that this extension must be applied for. Otherwise, it is assumed a company will file on time and penalties will automatically be generated for late returns.

It has also been announced that those companies issued with a late filing penalty due to COVID-19 will have their appeals treated sympathetically, with additional support available with payment plans for late filing penalties.

Appeals for late filing penalties can now be made online at https://beta.companieshouse.gov.uk/appeal-a-penalty/.

If a late filing penalty was incurred on or after 30 March 2020, it will usually be possible to pay the penalty online, with details available on the penalty notice. For penalties occurring before that date, multiple penalties, a part paid penalty or a penalty under an instalment plan, payment will need to be made by BACS instead.

Further information is available at https://www.gov.uk/government/publications/late-filing-penalties/late-filing-penalties.

Companies House is temporarily pausing the strike off process, to avoid companies unfairly being dissolved. The main aim is to give those companies affected by COVID-19 the opportunity to update their records, including any necessary filings, to avoid being struck off.

Where a confirmation statement or annual accounts are overdue, Companies House will still write to companies, but will not then continue to publish a notice in the Gazette informing the public that the registrar intends to strike off the company.

In the case of applications for voluntary strike off via form DS01, the required Gazette notice will still be published, but – to give proper time and opportunity for creditors and other interested parties who might wish to object to the strike off application – no further action will currently be taken to strike off and dissolve the company.

Paper forms are currently taking longer to process at Companies House.

Wherever possible, companies and their advisers are encouraged to file electronically. As well as instant submission and quicker processing, using a service such as Inform Direct offers a number of advantages.

Companies House has launched an emergency filing service, allowing companies to upload and submit certain forms which can otherwise only currently be filed on paper. Currently, these are limited to the following ‘registrar’s powers’ forms:

• rectification by the registrar of companies (RP02A)
• rectification of a change of registered address (RP02B)
• objection to a request to rectify the register (RP03)
• remove material about a director (RP06)
• change a company’s disputed registered office address (RP07)
• correct a director’s date of birth (RPCH01)

You can either complete the form manually on screen or print it and fill in the paper copy. Either way, where the form requires a signature, it must be printed, signed and then scanned and sent.

Companies House hopes to extend this service to other forms only available on paper and to add further features, including the facility for electronic payment when a fee is due.

HMRC has introduced changes to their processes for dealing with the payment of stamp duty in respect of stock transfer forms.

Stamp duty must currently be paid electronically, using BACS, CHAPS or Faster Payment.

Where a stock transfer form needs to be sent to HMRC for stamping, it should not be posted but instead sent in an electronic form, such as a scanned pdf (on which an e-signature is temporarily acceptable). The completed form should be emailed, along with prescribed details about the payment to which it relates, to [email protected].

HMRC will issue the company with a letter instead of stamping the form.

Further details are available on HMRC’s website.

Similarly, the SH03 form to notify a purchase of a company’s own shares is normally first sent to HMRC for stamping if the purchase is above the duty payable threshold.

While HMRC still require sight of the SH03 form, they will again issue your company with a letter rather than stamping the form. Companies House will accept and register an unstamped SH03 form as long as it is accompanied by the letter from HMRC confirming that the correct duty has been paid.

Companies House has also confirmed that it will accept and register court orders sanctioning Schemes of Arrangement, where they are accompanied by either:

• a letter from HMRC confirming that the correct duty has been paid; or
• a letter from HMRC confirming that no duty is payable.

As part of the coronavirus job retention scheme, HMRC has confirmed that companies can opt to furlough one or more directors, or even the whole board.

However, HMRC expects a process to be followed, with a formal, documented decision by the board made to furlough a director. We’ve created a guide to record the furlough of a director, which also includes:

• Template board minutes to document the decision;
• An appropriate form of notice and reply; and
• Notes on what a director can and can’t do while furloughed, with particular reference to their statutory obligations

While most paper forms should continue to be accepted, albeit with a slower turnaround, an exception is the application to restrict the disclosure of information under sections 243, 790ZF or 790ZG of the Companies Act 2006.

Applications must now be made online at https://beta.companieshouse.gov.uk/protect-your-details/start rather than by paper form.

With retrospective effect from 1 March 2020, there is a(n initial) three-month suspension of the rules relating to wrongful trading, removing the thread of directors’ personal liability while continuing to trade during the COVID-19 crisis.

Other insolvency measures introduced include allowing companies to continue to access essential supplies – such as energy, raw materials and component parts – while attempts are made to rescue the business. Those companies going through a process of restructuring will also have a time limited moratorium from action by creditors.

While the aim here is to allow directors to keep their businesses trading even if there are insolvency fears, with the hope the business will be viable once the immediate crisis abates, it’s important to remember that all other checks and balances on companies, including the responsibilities of directors, remain in force.

Most private limited companies, including those that use the Model Articles of Association or Inform Direct’s enhanced articles, are already able to hold an annual general meeting remotely where one is required.

However, the government is bringing in legislation to assist those companies where existing law or the articles of association require an AGM to be held with members physically present – such as for listed companies. The new provisions will temporarily override a company’s articles of association, providing the ability for meetings to occur safely, consistent with movement restrictions introduced to limit the spread of coronavirus. Companies will have greater flexibility to postpone meetings falling due or to hold AGMs remotely via electronic means.