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Measure Initiative

By Justin Nelson,2014-08-09 11:04
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Measure Initiative

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29 November 2005

Introduction

Simplify@dti

Help develop DTI’s Simplification Plan

    As well a submitting your ideas on how DTI regulations and policies could be simplified to reduce burdens, we want to share the developing DTI Simplification Plan with you and to invite your views.

    The Table below sets out proposals from across our policy areas that we have so far identified for the first edition of our rolling Simplification Plan.

    The Plan includes measures that will take us to our ?1 billion target for deregulatory savings over the period of our 2005-2010 Programme. It will also help DTI to deliver a 25% reduction in administrative burdens.

Some of the work is well down the track for instance our major reform Company Law Reform Bill,

    and the roll out of Common Commencement Dates across our policy areas.

    There are many new ideas too. We will work closely with stakeholders in the coming weeks to test and strengthen these and to develop our project plans. Your input is vital in working these up.

Tell us what you think

    If you want to find out more about any of the items in our developing Plan or have views on how we can take them forward, let us know. Get in touch using the simplify@dti contact routes. You can find out

    more about this initiative at http://www.dti.gov.uk/simplify

    The main focus is on simplification of our domestic regulation. But we are continuing our work with the European Commission and other Members Sates to build a strong, competitiveness-focused programme of simplification at EU level.

    This is an important strand of the EU regulatory reform agenda. If you have proposals for reducing burdens from EU legislation, without undermining the policy goals, we want to hear about it.

What will the DTI Plan look like?

    Alongside a strong forward agenda for simplification across DTI policy area, our Plan will to set out a vision of what a Better Regulation department should look like in terms of its culture and its people.

    It will also seek to show how we work to deliver world-class regulation where it is needed to strengthen market frameworks and competitiveness, and to raise standards for citizens.

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    29 November 2005

    DRAFT DTI SIMPLIFICATION PLAN

    Company Law Obligation for paper Facilitate e-Comms Enhances the timeliness of Significant cost savings Before Reform Bill: communication with company communications related to the elimination of Parliament communication shareholders with stakeholders leading to paper communications. with shareholders reduced informational Initial estimates suggest that

    asymmetry etc the net benefit of this

    measure might be in the

    region of ?47m for FTSE-

    listed companies alone.

    However, since large

    companies can incur costs in

    the range ?100k - ?400k

    per mailing the above

    range is likely to be an

    underestimate.

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    29 November 2005

    DRAFT DTI SIMPLIFICATION PLAN Company Law Directors’ general The Bill will introduce a statutory Codification of directors’ Using data from the 2002 Before Reform Bill: duties are contained statement of director’s duties. duties will make the law in White Paper “Modernising Parliament codification of in case law and not this area more consistent, Company Law”, the directors’ duties always well certain, accessible and benefits accruing from

    understood comprehensible. greater clarity could be

     around ?30m - ?105m per

    The change of the law on year (assuming 8% 12%

    conflicts of interest is likely to of 1,245,000 private

    bring real, though companies (99,600

    unquantifiable, economic 149,400) no longer need to

    benefits, by making it easier take advice on this issue

    for a director to exploit that costs ?300 - ?700 per

    business opportunities that year per company)

    the company is unable or

    unwilling to exploit itself.

    Company Law Rewriting company Redraft law to provide clearer Simpler law will reduce SME representatives Before Reform Bill: law to think small structure and language. agency costs. SME business estimate that simpler law Parliament simpler law for first to improve representatives have argued will yield savings in the small firms comprehension and Provide better guidance. convincingly that simpler law, region of ?30m per year.

    accessibility which “fits small business However, the actual cost

    reality” better, will greatly savings will depend on final

    increase business confidence drafting of the Bill and its

    in the overall regulatory regulations. The full benefits

    environment and increase of simpler law will also

    compliance. depend crucially on the

    success of parallel non-

    legislative measures such as

    accessibility and guidance.

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    29 November 2005

    DRAFT DTI SIMPLIFICATION PLAN Company Law Obligation to hold The Bill includes measures to Data from the 2002 White Annual savings are Before Reform Bill: an Annual General streamline company decision-Paper “Modernising estimated to be around ?50 Parliament streamlining Meeting etc. making processes and to bring Company Law”, obtained -?150 per firm. Assuming corporate decision them more in line with the realities through consultation with 40% - 60% of the 1,245,000 making processes Procedures for of modern business life. stakeholders, confirms that private companies (i.e.

    written resolutions changes in this area are likely 498,000 747,000) take

    etc. to produce some of the most advantage of the change,

    significant deregulatory the savings will be ?25m -

    benefits as small, private firms ?112m per annum.

    may be able to avoid the

    need for unnecessary

    meetings.

    Although at first sight this

    might seem to make it easier

    for companies to dispense

    with input from shareholders,

    in practice more streamlined

    and efficient mechanisms for

    taking shareholder views

    ought to increase effective

    shareholder engagement.

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    29 November 2005

    DRAFT DTI SIMPLIFICATION PLAN Company Law Companies must Abolish requirement that private For the majority of smaller Using data from the 2002 Before Reform Bill: appoint a company companies have company companies, it is unlikely that White Paper “Modernising Parliament Remove secretary even when secretary. the requirement adds any Company Law” suggests requirement to this is inappropriate value to the position that estimated benefits of ?3.1m appoint company would anyway apply. - ?6.2m per year (assuming secretary that 5% of 1,245,000 private

    companies (62,250) are able

    to make savings of between

    ?50 - ?100 per year by not

    needing to employ a

    professional to act as a

    company secretary). This

    may be an under-estimate

    as over 50,000 companies

    with fewer than 5

    shareholders have only one

    director in addition to the

    company secretary.

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    29 November 2005

    DRAFT DTI SIMPLIFICATION PLAN Company Law Capital maintenance Simplification of capital Will save transaction costs Estimates provided by the Before Reform Bill: and share maintenance provisions includes Law Society to Company Parliament simplification of provisions, whilst the abolition of the “financial Law Review indicate that capital maintenance obviously important assistance” rules for private this measure may save provisions in protecting the companies, which currently ?20m per year in

    interests of a prevent private companies from transaction costs that are

    company’s assisting with the purchase of their currently incurred.

    creditors, give rise own shares, and clarifications to

    to some of the the rules on intra group transfers

    complex and of assets.

    technically

    challenging

    provisions of the

    current Act 94

    sections of detailed

    rules in total. As a

    result companies

    and their advisers

    can spend a

    disproportionate

    amount of time and

    money ensuring

    that they do not

    inadvertently fall

    foul of these rules.

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    29 November 2005

    DRAFT DTI SIMPLIFICATION PLAN Company Law Obligation for Replace the requirement for OFR The key improvements in Removing the requirement Ministerial Removal of directors of publicly with a requirement to provide a narrative reporting from the for quoted companies to Clearance requirement to quoted companies Business Review (in line with the OFR are in the Business produce and have audited provide an to include a formal minimum requirements of the EU Review, but in a less an OFR would reduce operating and and detailed Accounts Modernisation Directive). prescriptive and more flexible business costs by up to ?33 financial review operating and form, e.g. million per annum (OFR) financial review in ; information relating annual reports. to employee, social and

    environmental matters

    where it is material;

    ; description of

    principal risks and

    uncertainties facing the

    company;

    ; balanced and

    comprehensive analysis

    of the development and

    performance and

    position of the business.

    The newly developed

    reporting standards will be

    built on in voluntary guidance

    Business compliance costs will

    be substantially reduced.

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    29 November 2005

    DRAFT DTI SIMPLIFICATION PLAN Companies House: Administrative Development of electronic services Savings from reduced fees for ?111m in saved fees by Implemented Electronic Filing burden with substantial revision of pricing those filing electronically. Plus 2010 on current forecasts February 2005

     structure. Form filling eased time savings for business. (?22.2m per annum) +

    through electronic filing with savings in form filling.

    online assistance in getting it right.

    Companies House: Development of electronic services Reduced cost and greater ?5m pa. based on 2004/5 Implemented online information with substantial revision of pricing ease of searching. volumes February 2005 search on the structure

    companies register Market benefit from

    improved accessibility to

    company data

    Companies House: Ease of use of Changes to Companies House Individual company portals to To be determined Will be My Companies online Companies website the CH record allowing on implemented House House registration line management of account 2006

    and database and access to wider range of

    services. services

    Companies House: Administrative Simplify online filing for small Reduced costs and better To be determined Implemented e-accounts accounts using intelligent form quality returns through use of November

    technology. online help wizards, 2005

    automatic checks. Reduced

    chance of late filing penalties.

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    29 November 2005

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