UK Company Law
This page covers selected developments in UK companies legislation, prospective legislation and related matters of professional concern to accountants in practice, industry or commerce.
Information on this page is open to the public but may include links to material where access is limited to members or certain members of ICAEW.
Corporate Transparency and Register Reform
In September 2020 government published proposals for radical reform of the UK company law framework, including requiring mandatory verification of directors’ identity. ICAEW is represented on the working group convened to help government develop the proposals further.
On 9 December 2020 government published the three related consultations asking for responses by 3 February. Visit the pages below to read more about the consultations and our responses to them:
- The ban on corporate directors.
- Increased powers for the registrar.
- Improving the quality and value of financial information on the UK companies register.
Exemption from audit by parent company guarantee
Following the end of the Brexit transition period (11.00pm 31 December 2020), the exemption from audit by parent company guarantee will apply only in relation to guarantees by parent undertakings established in any part of the UK.
Dividends and distributable profits
Paying dividends - the essentials
A reminder for directors of micro and other small companies.
ICAEW Introduction to the Law on Dividends
This introduction to the law on dividends provides an overview of the various laws that directors should be aware of before making dividend payments, outlines the general principles on the realisation of profits and losses when applying the relevant legislation and describes the subject matter of each chapter of Tech 02/17BL.
It aims to inform readers who are not accountants (eg some directors) about the subject generally and to make Tech 02/17BL and its principles more widely accessible. It also helps accountants to use Tech 02/17BL by putting it into a broader context.
It does not address any issues arising from COVID-19 (see our COVID hub for further information on COVID).
Tech 02/17 BL - ICAEW and ICAS Guidance on realised and distributable profits under the Companies Act 2006
This Technical Release provides guidance on realised and distributable profits under the Companies Act 2006 (as amended) (the Act) and all relevant statutory instruments made under the Act. Its purpose is to identify, interpret and apply the principles relating to the determination of realised profits and losses for the purposes of making distributions under the Act.
It is based on the guidance previously issued as TECH 02/10 in October 2010 but has been updated as proposed in TECH 05/16 which was issued for comment in March 2016. For the convenience of users, paragraph numbering has been kept consistent with TECH 02/10 so far as possible and consequently some paragraph numbers are not used where material has been deleted or moved.
Fifth Anti-Money Laundering Directive – duty to report regarding beneficial owners
On 10 January 2020, the Fifth Anti-Money Laundering Directive (5MLD) came into force in the UK through the Money Laundering and Terrorist Financing (Amendment) Regulations 2019.
As a result obliged entities (including auditors and external accountants) must tell Companies House if there is a discrepancy between the information that they hold about a beneficial owner of a company, limited liability partnership, or Scottish limited or qualifying partnership and the information that is on the public people with significant control (PSC) register.
A beneficial owner does not have the same definition as a PSC. The requirement to report discrepancies is based on the Companies Act definition of a PSC.
Companies House has published guidance on the requirement:
The Register of Persons with Significant Control and other recent changes made by the Small Business, Enterprise and Employment Act 2015 to company law.
The Small Business, Enterprise and Employment Act 2015 (SBEE) introduced a new regime for UK companies and Limited Liability Partnerships (LLPs) to keep a register of significant controllers (PSC register) and to file related information with Companies House. The regime has since been amended and extended to cover additional legal entities.
We give an overview of the PSC regime in effect at 15 July 2017 below. The Department for Business, Energy & Industrial Strategy (BEIS) has issued guidance which is more detailed than this and to which reference should be made where appropriate. The Law Society and City of London Law Society have published a series of Q&As concerning certain complexities that are not specifically addressed in the legislation or BEIS guidance.
The legislation follows government consultations on trust and transparency and money laundering regulation during which ICAEW raised a number of concerns about the likely effectiveness of the regime and its burdens on business (in particular Rep 125-13 on trust and transparency, Rep 162/14 and Rep 99/15 on the PSC register, Rep 190-16 on extending the regime to more UK entities) and Rep 65-16 and Rep 59-17 on proposals (not yet implemented) to extend the regime to foreign entities.
SBEE made other changes to UK companies law and we also give an overview of these changes below.
ICAEW briefings and responses to company law consultations
Other ICAEW company law publications
TECH 01/11 Guidance for directors on accounting records under the Companies Act 200
27 Jan 2011
Guidance on the meaning and application of the 'adequate accounting records' requirement in section 386.
ICAEW's guide to directors' responsibilities
This ICAEW guide provides an overview of directors' responsibilities and duties, including on internal governance, transactions between a company and its directors or shareholders, and corporate administration. It also covers responsibilities in relation to insolvent or financially challenged companies, as well as penalties for breach of directors' responsibilities.