|
Companies (Audit, Investigations and Community Enterprise) Act 2004
"Legislation will also be introduced to modernise company accounting and audit arrangements."
"A thriving not-for-profit sector is part of the fabric of a modern democratic society. My Government will introduce a Bill to create Community Interest Companies which will enable social enterprises to meet the needs of their communities in new and innovative ways."
The Companies Bill will implement safeguards recommended by post-Enron/Worldcom reviews in order to prevent the occurrence of similar events in the UK.
The Bill will tighten the regulation of auditing and increase powers to investigate companies.
It will strengthen auditors' powers to obtain information from directors, employees and others.
Under the Bill, directors will be required to state that they have not withheld any relevant information from their auditors.
In addition, companies will be required to publish full details about the non-audit services they have bought from their auditors.
The Bill will allow the Inland Revenue to pass on information about suspect accounts that it has come across during its tax investigations.
It will also strengthen the role of the Financial Reporting Review Panel in enforcing accounting requirements.
As part of government recognition that the needs of communities are increasingly met by social enterprises, the Bill will create a company form for non-charitable social enterprises.
The Bill will allow a new type of company, the Community Interest Company (CIC), to be created.
CICs will offer social enterprises the "certainty and flexibility" of the company form, while ensuring that they retain their social aims.
CICs will be subject to eligibility testing, and will be required to produce annual reports on how they have pursued their social or community objectives and how they have worked with their stakeholders.
CICs will also be able to issue tradeable shares to gain investment, but the dividends paid on those shares will be capped. In addition, the Bill will allow them to transfer assets to other suitable organisations.
Progress
House of Lords
First reading: December 3 2003 (HL Bill 8)
Second reading: January 8 2004
Committee stage:
Bill as amended in the committee (HL Bill 51)
Report stage: July 7 2004
Bill as amended in the report HL Bill 98
Third reading: July 14 2004
House of Commons
First reading: July 14 2004 (HC Bill 142)
Second reading: September 7 2004
Committee stage:
Bill as amended in the committee HC Bill 158
Remaining stages: October 19 2004
Consideration of Commons amendments: October 21 2004
Royal Assent October 28 2004
Companies (Audit, Investigations and Community Enterprise) Act 2004
|
