For those that have not seen the delightful new IN01 form that came into force on the 1 October 2009, among other things there is requirement to insert a statement of capital. A one page blank section has been allocated to this and continuation pages may be used if required.
It appears that the statement of capital should be an exact explanation of voting rights, dividend rights, capital rights, redemption terms as well as anything else that may pertain to the rights of shares.
For us accountants and formation agents, what should we insert in the statement of capital? You would have thought that we would simply refer to some guidance notes. However there is so little guidance available. Neither Companies House, Department of Business, Innovation and Skills, or any of the professional bodies appear to have published any guidance. Why?
Having spoken to Companies House personally on this matter they confidently referred me to the ICSA guidance on this matter. Great I thought. There was little guidance within the short paper that they had prepared and their paper specifically appeared to rant over the fact that the IN01 form does not cater sufficiently for share premium. The ICSA then goes on to state “The Department of BIS will, in the longer term, review whether a change to Companies House forms or the Companies Act 2006 is necessary”. I read this as admission that the IN01 form (and possibly the process) has defects.
So I thought I would take a look at a handful of IN01 forms that had been submitted to Companies House to incorporate real companies and my findings worried me - there were huge discrepancies and a variety of the extent of detail from “full rights” (whatever that means) to what appeared to look like war and peace.
Is it me or does anyone else see the problem here?
If anyone from Companies House, BIS or any of the professional bodies are reading this it would be useful to add this problem to your “to-do” list prior to Christmas.