The Government is planning to spare thousands of businesses from red tape after announcing the interim results from the Company and Commercial Law Red Tape Challenge.
The interim findings show that half of the 115 regulations on the day to day running of a company and the preparing and filing of their accounts are to be scrapped, merged or simplified.
The Government has also announced:
• Reform of the company and business names regime. Proposals include removing certain names from the list of words which require approval from specified bodies before being registered at Companies House. The list of 161 words and expressions contains, amongst others, examples such as; ‘Accredited’; ‘British’; ‘Group’; ‘International’; ‘Benevolent’; ‘Holding’; ‘Institute’; and ‘University’. Of course some names will still need approval such as those which may cause offence.
• Measures to simplify the regulations a company must abide by when displaying the company name at their premises, on paper or online. Currently, companies must display their registered name at their registered office, and all other business premises, and on all business documentation. The proposal will enable them to find all the rules together in one place.
• Proposals for companies with less than ten employees (micro-businesses) to be freed from red tape by removing certain accounting requirements. Under the micros exemption proposal, micro-businesses would be able to prepare much reduced annual accounts. There are 1.2 million micro-businesses in the UK and they will be able to draw up shortened balance sheets and profit and loss accounts and will remain exempt from the requirement to file the profit and loss account.
• Other amendments to the Companies Act which will simplify the system for companies to use assets to raise finance, streamline company annual reporting requirements and repeal certain filing obligations when companies change their auditors.
The announcement is the first stage of the Company Law Red Tape Challenge covering proposals regulating the day to day running of a company. BIS is working with Companies House to consider what further improvements can be made in relation to information sent to Companies House, in particular, whether it is possible to reduce duplication of information sent to Companies House and Government.
A second Red Tape Challenge announcement of proposals relating to regulations that deal with Companies House will be announced at a later date this year.
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