smallbusiness.co.uk: Helping your business think big

The Companies Bill, the longest piece of legislation ever passed in the UK, has received ‘royal assent’ making it law, despite concerns from some organisations over a clause which may force firms to invest in new tools to improve supply chain visibility.

The new Act introduces sweeping changes intended to simplify and improve company law to make it easier to understand. However, businesses could be forced to update their IT systems so they can disclose information about their supply chain which, says Patricia Peter, head of corporate governance at the Institute of Directors, ‘is particularly concerning for global companies with multiple supply chains and small businesses with limited resources.’

Tim Moss, director of corporate strategy at Companies House highlights the ‘Think Small First’ approach as a positive change for small business owners. The aim is to formulate company regulation ‘with small business in mind, rather than focusing on larger companies and providing exceptions for SMEs,’ he says.

‘This is the most sizeable change to company law for a long time,’ says Moss, ‘it will affect the way that companies run and offer many advantages. It is vital that business owners are aware of the changes that are being implemented,’ he adds. The changes will also affect the way that Companies House operates, with plans to allow businesses to file more information electronically, ‘reducing the amount of time spent on compliance and minimising costs.’

The small business service arm of the DTI predicts that the changes will save UK business around ‘£250 million a year, including up to £100 million for small businesses.’

‘This Act will help ensure Britain remains one of the best places in the world to set up and run a business,’ claims Secretary of State Alistair Darling, ‘It makes sure the regulatory burden on business is “light-touch”, promotes shareholder engagement and will help encourage a long-term investment culture in the UK.’

Businesses will have until October 2008 to comply with provisions in the new Companies Act.

The Act is expected to be published two weeks following Royal Assent. To visit the DTI website for more information, click here.

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