The Small Business, Enterprise and Employment Act 2015 (‘SBEEA 2015’) introduced a raft of company law reforms, one of which was to abolish the annual return and replace it with the confirmation statement. This reforms was identified by BIS as one that would have the highest impact upon companies, and so its implementation was towards the back end of the Act’s implementation. On the 30th June 2016, this reform came into effect.
Section 854 of the Companies Act 2006 (‘CA 2006’), which has now been repealed, provided that all companies had to submit an annual return each year. The annual return would contain specified information, which would then be made part of the public register. During the last government’s Red Tape Challenge, a small number of respondents complained that the information disclosed in their annual return was often the same as was disclosed the year before, and this therefore involved a pointless duplication of work. Instead, such companies argued they should simply be able to confirm whether the existing information is correct or not, and any such information that was out-of-date could then be changed, as opposed to submitting a complete annual return.
This suggestion was imply,ended by s 92 of SBEEA 2015, which gntoriced new provisions into the CA 2006. a new s 853A of the CA 2006 now provides that every company must deliver a confirmation statement (there are similar rules requiring LLPs to submit a confirmation statement too). A confirmation statement is merely a statement confirming that the required information has been delivered to Companies House, or will be delivered at the same time as the confirmation statement.
Although this reform has been labelled as high impact by BIS, in reality, the reform will have a limited impact upon most companies and LLPs for two reasons:
- The information required is largely the same as that required under an annual return. There is, however, one notable addition, namely that information relating to the PSC register must also be filed alongside the confirmation statement. The PSC register is discussed in this blog post.
- For companies that file their annual returns electronically, which according to Companies House’s latest Annual Report is around 98% of companies, the annual return could be pre-populated with the previous year’s information, meaning that only the changes needed be noted.
The result of this is that the move from the annual return to the confirmation statement is likely to be of substantial benefit only to the small number of companies that filed paper copies of their annual return. Given that Companies House is committed to going 100% digital, this issue would have been resolved at some point in the future anyway.
Further guidance on the confirmation statement has been provided by Companies House and can be obtained by clicking here.
Featured Image: Companies House Form CS01, which can be obtained from here.