UK Offence Report

The Companies (Miscellaneous Reporting) Regulations 2018

UK Statutory Instrument 2018 No. 860 — creates 2 criminal offences.

2offences created
0recorded in force
0revoked
Made
17 July 2018
In force from
Not determined
Extent
Not stated
Subject
Corporate, financial services, company law, employment, charity, electoral and tax
Made under
Companies (Audit, Investigations and Community Enterprise) Act 2004, Companies Act 2006

Explanatory note

(This note is not part of the Regulations) — published with the instrument by the department that made it. © Crown copyright, reused under the Open Government Licence v3.0.

These Regulations make changes to the reporting requirements found in Part 15 of the Companies Act 2006 and the Large and Medium-Sized Companies and Groups (Accounts and Reports) Regulations 2008 (“the 2008 Regulations”). These Regulations also amend the Community Interest Company Regulations 2005 (“the CIC Regulations”). These Regulations extend to the whole of the United Kingdom, reflecting the extent of the Companies Act 2006 and Part 2 of the Companies (Audit, Investigations and Community Enterprise) Act 2004. Regulation 1 makes provision for differential commencement in relation to the provisions of these Regulations and for their application. Part 2 (regulations 3 to 6) amends the Companies Act 2006, providing a new requirement to include a statement in the strategic report on how the directors have had regard to the matters set out in section 172 of that Act in the exercise of their duties. Part 3 amends the 2008 Regulations to require companies to report additional information in the directors’ report. Regulation 8 makes consequential provision, and regulation 9 amends the review clause in the 2008 Regulations to require a review of the amendments made by these Regulations. Regulation 10 corrects definitions in Schedule 5 to the 2008 Regulations which refer to repealed legislation. This regulation will align the definitions in Schedule 5 with those in Schedule 8 of the 2008 Regulations which were previously amended, as well as the definitions used in the new Schedule 4A of the CIC Regulations inserted by regulations 20 to 23 of these Regulations. Regulation 12 aligns the formula provided in Schedule 7 to the 2008 Regulations for calculating the average number of employees with the formula used in the Companies Act 2006. Regulation 13 amends Part 4 of Schedule 7 of the 2008 Regulations to require additional reporting on a company’s engagement with its employees, and suppliers, customers and others in a business relationship, to provide further explanation on how the directors of the company have complied with the duty to have regard in section 172. Regulation 14 inserts a new Part 8 into Schedule 7 to the 2008 Regulations requiring companies which in a financial year have more than 2000 employees, or a turnover of more than £200 million and a balance sheet total of more than £2 billion, to provide a statement of corporate governance arrangements in relation to that year. Regulations 15 to 19 amend Schedule 8 to the 2008 Regulations to require additional information in the Directors’ Remuneration Report. Regulation 16 requires that the annual statement from the chair of the remuneration committee includes a summary of any discretion exercised by the remuneration committee in relation to the award of directors’ remuneration. Regulation 17 requires companies to report how much of a director’s pay award is attributable to share price growth, and extends the requirement to report on the exercise of discretion in relation to the award to specifically address whether discretion has been exercised due to changes in share price. It also places new requirements on companies with more than 250 UK employees to report pay ratio information comparing the remuneration of the CEO with the 25th, 50th and 75th percentile of the full time equivalent remuneration of the company’s UK employees. For a parent company within the meaning of the Companies Act 2006 the information must relate to the group. Regulation 18 places a new requirement for companies to include in the remuneration policy an illustration, in relation to performance measures or targets, of the maximum remuneration of directors assuming share price growth of 50% during the performance period. Regulation 19 inserts a new definition into the interpretation provision for Schedule 8. Part 4 (regulations 20 to 23) amends the CIC Regulations. These provisions remedy a gap created when Schedule 3 to the Small Companies and Groups (Accounts and Reports) Regulations 2008 (“the Small Company Regulations”) was revoked by the Companies, Partnerships and Groups (Accounts and Reports) Regulations 2015. Section 34 of the Companies, Audit, Investigations and Enterprise Act 2004 requires regulations to make provision for community interest company reports to include information about the remuneration of directors. Regulation 23 amends the CIC Regulations by inserting Schedule 4A into the CIC Regulations, the content of which is a reproduction of the revoked Schedule 3, with minor amendments to definitions to include cross-references to the appropriate legislation. A full regulatory impact assessment has not been produced in relation to Part 4 of the instrument as no impact on the private or voluntary sectors is foreseen. A full regulatory impact assessment of the effect that Parts 2 and 3 of this instrument will have on the costs of business and the voluntary sector is available from the Business Frameworks and Regional Growth Fund Directorate, Department for Business, Energy and Industrial Strategy, 1 Victoria Street, London SW1H OET or from www.gov.uk/beis, and is also available alongside this instrument at www.legislation.gov.uk.

Offences created by this instrument

What Parliament said about it

Contributions, debates and written statements mentioning this instrument by name. Parliamentary material is reused under the Open Parliament Licence v3.0.

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