Lees Solicitors - Statements of Capital - Companies Act 2006 - Jon Bloor

Business Services News

Statements of Capital - Companies Act 2006 - Jon Bloor


Statements of Capital - Companies Act 2006 - Jon Bloor

The final implementation of the Companies Act 2006 has given company directors and secretaries a whole new set of Companies House forms to come to terms with.

There are some peculiarities (one Companies House form 288b used to be sufficient to record a resignation as director and secretary - now forms TM01 and TM02 need to be filed) but generally the new forms are straightforward.

More of our clients are using the Companies House web filing service in any event, which makes the paper forms irrelevant for many purposes.

The one requirement which has caused some confusion as companies come across it is the "Statement of Capital".

This is a new requirement of the Companies Act 2006 which companies will need to deal with whether they file their forms online or in hard copy. At its most basic, it is a statement of a company's issued share capital which has to be given to Companies House in various situations (e.g. an allotment of new shares or when the annual return is filed).

The Statement of Capital is incorporated in the relevant Companies House forms (with certain limited exceptions) rather than being a separate document.

The Statement of Capital must state the total number of shares in the company and the aggregate nominal value of those shares.

For each class of shares the Statement of Capital is required to show:

  • Certain particulars of the rights attaching to the shares (see below)
  • The total number of issued shares in the class
  • The total nominal value of shares in the class; and
  • The amount paid up and unpaid on those shares (including share premium)

The last item can cause problems for companies with complicated capital structures and BIS are currently consulting about how these companies should complete Statements of Capital. For the time being the advice is for them to provide as much detail as possible as Companies House will reject forms if this information is not completed in the Statement of Capital.

The required particulars of the rights attaching to the shares are:

  • Voting rights (including those which only arise in certain circumstances - e.g. swamping rights held by an investor)
  • Rights to receive a dividend on a distribution
  • Rights to receive a capital contribution on a winding-up or liquidation
  • Whether the shares are redeemable (either at the option of the company or the shareholder)

The details of these rights can be found in the articles of association of the company (as varied by any shareholder resolutions which have been passed to alter the rights).

For a company with one class of ordinary shares, there should be no problem completing the Statement of Capital. If the company has adopted articles based on the model articles contained in the Companies (Model Articles) Regulations 2008 then the standard wording in section 13 of the Companies House guidance note on Statements of Capital should be suitable for inclusion in the Statement of Capital.

Directors should note that the Companies House guidance makes it clear that particulars of the rights attaching to the shares need to be set out in full in the Statement of Capital. Companies House will not accept general statements or references such as "rights attaching to the shares are set out in the articles of association" or "the rights are the same as for the existing shares in the company".

Where the company has a more complicated capital structure (e.g. several classes of shares with different rights attaching to them) the Statement of Capital may be difficult to complete correctly and the directors may require professional advice.

In order to obtain this advice you will need to make sure that the copy of your company's articles of association filed at Companies House is up to date and that any resolutions altering share rights have also been duly filed.

Once this has been done we can provide you with a fixed fee quote for reviewing the Companies House records and providing you with a pro-forma Statement of Capital which can be used to complete the various Companies House forms as necessary.

For more information please contact Jon Bloor in our Corporate & Company Commercial team on 0151 647 9381.

Jon Bloor

 

This article provides a summary of a recent change in law. It is intended for general information purposes only and is not to be relied upon. It does not constitute legal advice and should not be treated under any circumstances as a substitute for legal advice. Lees Solicitors LLP does not accept any responsibility for any loss that may arise from reliance upon the information contained within this article. The copyright in this article is owned by Lees Solicitors LLP and permission must be sought before reproduction or publishing.


arrow Back to Business Services News