Companies Act on hold for another year

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The Independent Online

Corporate accountants and solicitors reacted angrily yesterday to an unexpected Government announcement that the final implementation of the Companies Act would be delayed by a year.

Stephen Timms, the Minister of State for Competitiveness, made the announcement at a CBI conference, following advice from Companies House that it was not certain there would be time to overhaul its systems before the original implementation deadline of 1 October 2008.

Mr Timms said he had therefore decided to delay the implementation of some aspects of the legislation, which is intended to cut red tape, until 1 October 2009. The delay affects the measures dealing with company constitutions, as well as new rules that would let company directors keep their home addresses private.

The minister said he had taken the decision to ensure companies did not waste time and money preparing for a deadline unnecessarily. However, John Newman, a partner at accountancy firm Blick Rothenberg, said: "What business values more than anything else is certainty and this announcement came out of the blue."

Mr Newman said corporate advisory specialists had already spent time working with companies on complying with the new rules. He also said it was particularly frustrating that the Department for Business, Enterprise and Regulatory Reform had sought to explain the effects of the delay through internet site links that did not work.

Janis Law, group chief solicitor at Jordans, another specialist adviser to companies, said many firms would now be very confused, particularly since some regulations in the Companies Act had been amended last month.

"The aim of the Act is to reduce red tape and company administration," she said. "But the 11th-hour changes that we saw last month and this significant delay will cost businesses money and add to the mounting confusion."