Update on recent law issues
Comming soon- Companies House online filing plans
Companies House have announced ambitious plans to move the majority of their filing services online by March 2013. They have stated that the expectation is that they will mandate electronic submissions for all incorporations, for the filing of annual returns and accounts and for the main changes of company details. They have stated that 'this would represent over 98% of the entities on the public register and over 92% of all transactions'.
Companies House and HMRC are continuing to work together with the aim of providing a single low-cost solution to online filing. Companies House have also said 'digital services offer significant cost savings over their paper equivalent. Those savings are passed on in full to our customers through lower fees - the statutory fees for our services are set on the basis of cost recovery. Our customers save 25% for electronic incorporation and 50% for electronic annual returns compared to paper-based transactions'.
Consultations will be undertaken on the change and it is expected that these will also look at how the very smallest entities and the very largest listed companies will fit into the scheme without them incurring unnecessary costs.
Focus on Bribery Act – required procedures
The Act presents a considerable risk to senior management and the organisations that they represent. The drafting of the Act has resulted in the potential offences being far reaching as it uses the definition 'financial or other advantage'. Concern has been expressed that the act is so widely drafted that it has the potential to criminalise conduct that was not previously viewed as criminal.
It’s anticipated that the Bribery Act will be implemented in April 2011. As you will know from previous ACCA articles, the consultation exercise on the guidance relating to procedures which commercial organisations can put in place to prevent bribery closed on the 8th November. The responses are now being analysed and it is expected that the results of this consultation will be published soon. Businesses will therefore only have a short time to consider the guidance and adapt it to take account of their business risks and to then introduce new processes before the act commences.
Written policies on areas such as employees, contractors and other third parties, covering payments and receipts of money, gifts, hospitality and even meetings, which are clear, accessible, and available throughout the organisation, will be vital.
As a reminder, Section 9 of the Bribery Act requires 'the Secretary of State to publish guidance about procedures that relevant commercial organisations can put in place to prevent persons associated with them from bribing'. Compliance with those procedures in Section 9 is important as Section 7 of the Bribery Act provides a statutory defence to the charge where an organisation can demonstrate that it has put suitable bribery prevention procedures in place.
The consultation suggests six principles to follow, and provides detailed guidance and illustrative scenarios that put the principles into practice. The six principles are:
- Risk Assessment – this is about knowing and keeping up to date with the bribery risks you face in your sector and market
- Top level commitment – this concerns establishing a culture across the organisation in which bribery is unacceptable. If your business is small or medium sized this may not require much sophistication but the theme is making the message clear, unambiguous and ensuring that it is regularly communicated to all staff and business partners
- Due diligence – this is about knowing who you do business with; knowing why, when and to whom you are releasing funds; seeking reciprocal anti-bribery agreements; and being in a position to feel confident that business relationships are transparent and ethical
- Clear, Practical and Accessible Policies and Procedures – this concerns applying them to everyone you employ and to business partners under your effective control, ensuring that they cover all relevant risks such as political and charitable contributions, gifts and hospitality, promotional expenses, and responding to demands when an allegation of bribery comes to light
- Effective implementation – this is about going beyond ‘paper compliance’ and embedding an anti-bribery ethos in your organisation
- Monitoring and review – this relates to auditing and financial controls that are sensitive to bribery and transparent. Consider how regularly you need to review your policies and procedures, and whether external verification would help.
Email email@example.com and inform us on how your preparation work is progressing or if you require help and support.
Consultation and feedback – Solicitors Regulation Authority (SRA), Legal Services Act and SRA Accounts rules
The Solicitors Regulation Authority paper The Architecture of Change Part 2 – the new SRA Handbook – feedback and further consultation provides feedback on their earlier consultation, highlights changes to the SRA handbook and consults on further rule changes. It should be read by those working for solicitors, auditors, accountants providing advice and anyone who is interested in the guidance on ownership of firms providing legal services.
The Legal Services Act 2007 sets out a regulatory framework for the ownership of legal services providers. The Act allows the formation of legal disciplinary practices (LDPs), which are firms providing exclusively legal services and which will allow up to 25 per cent ownership by non-lawyers and alternative business structures (ABSs), which will allow external ownership of legal businesses and multi-disciplinary practices (providing legal and other services). The SRA have stated that “The introduction of alternative business structures (ABSs) is one of the main reasons behind the revision of our current range of rules and regulations, as we are currently preparing to become a designated competent licensing authority (LA) in order to be able to license and regulate ABSs from October 2011.” The feedback and new consultation, according to the SRA, forms “part of a major transformation of the SRA's approach to regulating and supervising firms, in the context of the opening up of the legal services market.”
A few critical dates:
- Available now is the report on and response to April 2010 consultation (Outcomes-focused regulation – transforming the SRA's regulation of legal services) and the new consultation
- Responses to the new consultation should be sent to the SRA by 13 January 2011.
- The future role of the reporting accountant and the accountant's report regime is being reviewed. It is anticipated that the SRA will be publishing a consultation on this in 2011.
- August 2011 - Anticipated designation of SRA as a Licensing Authority for ABSs.
- October 2011 - First Alternative Business Structures licensed and implementation of new SRA Handbook.
Solicitors Regulation Authority (SRA)
The SRA currently have two consultations which are open for comment as follows:
1. 'Future client financial protection arrangements'.
This deals with proposals for amendments to the client financial protection arrangements. The amendments are expected to be effective from October 2011. The consultation is open until 28 February 2011.
In summary this deals with Professional Indemnity Insurance and the Compensation Fund.
2. "The Architecture of Change Part 2 - the new SRA Handbook - feedback and further consultation".
This consultation is the last opportunity for comments on the new SRA's new handbook which will underpin the regulation of solicitors and law firms from October 2011.
The consultation is open until 13 January 2011.
The new handbook will apply to both traditional law firms and alternative business structures (ABSs) - the new kind of law firms which will come into the legal services market.
The new handbook will include the revised SRA Accounts Rules.
The consultations can be found at the following address: http://www.sra.org.uk/consultations/
Legal Services Act 2007
This Act received Royal Assent on 30 October 2007 but is not expected to be fully in force until 2011 or 2012.
The Act does the following three main things.
1. It creates the Legal Services Board (LSB) to supervise the regulation of legal services by all approved regulators, such as the Solicitors Regulation Authority, the Law Society, the Bar Standards Board and the Council for licensed Conveyances. The LSB formally went live in its regulatory role on 1 January 2010.
2. It created the Office for Legal Complaints (OLC) - a new independent ombudsman service to deal with all consumer complaints about legal services. The ombudsman started to receive complains on 6 October 2010. The OLC will cover the work of all lawyers and will deal with redress - not with regulation.
3. It enables new forms of legal practice to develop - both legal disciplinary practices or LDPs (firms involving different kinds of lawyers, and up to 25 per cent non-lawyers, but still providing legal services) and alternative business structures or ABSs, which will allow external ownership of legal businesses ("Tesco law"), multidisciplinary practices (Providing legal and other services) and many things in between.
Further information concerning the Legal Services Act 2007 can be found at the following address: http://www.sra.org.uk/sra/legal-services-act.page