May 2008 - Getting to grips with the companies act


Business Law Update
from Cousins Business Law

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May 2008

Welcome to the first issue of Business Law Update from Cousins Business Law.

Cousins Business Law website When I took over the business law practice of Woolley & Co earlier this year, I was committed to writing a regular ezine and maintaining an information packed website.  Our new website has been live now for a few weeks – still on the same url:, but with lots of new and updated content.

In this, our first ezine, there’s a quick legal update – looking at some of the more significant impacts of the Companies Act, there’s Cousins Business Law advice for business owners feeling the pinch during the credit crunch and plain English advice for anyone taking out a new lease.  The aim is to provide useful information for business people, in plain English and with a practical slant.

We are keen to cover topics of concern to business people so if you have questions or topics you would like us to cover email your ideas to


Cousins logoGary Cousins
0121 778 3212


Sprinkling Sugar on the Credit Crunch

It may sound like a new brand of breakfast cereal but why are the banks so keen to try and put a sugar-coating on the credit crunch?

If the talking heads in the financial world are to be believed, the problems in the credit markets will all be over by Christmas. That timescale has been given in relation to global strife in the past and there are reasons to believe that it will be no more accurate this time than it was in 1914.

The reality is a lot of people in the banking sector are very nervous. Their nervousness arises from the fact that no one really knows which institutions are most exposed to the toxic debt that was packaged up and sold all around the world. Most importantly, they don’t know the level of their own exposure, as the financial instruments that were created were so complex that it is difficult to know who now bears the risk if the borrowers behind these products default.

The result of this fear is banks are nervous about lending to each other and are attempting to hoard cash. Credit at the moment has become a one-way street with all of us lending to the banks (in the form of savings) without reciprocal lending by the banks to us.

The reason the banks are trying to sprinkle a little sugar on the credit crunch, therefore, is that they need our money. RBS and HBOS have already announced rights issues to improve the parlous state of their balance sheets and more banks are sure to follow suit in a desperate bid to hoover up our cash before it runs out. 

Banks also fear becoming the next Northern Rock. They are desperately trying to reassure their customers that they are in a sound financial state to avoid the loss of faith that saw customers withdraw billions of pounds in the first run on a bank in over a century. Expect to hear plenty of phrases from your local business manager along the lines of “it’s business as usual here” whilst quietly declining your application to renew your overdraft facility.

Cousins Business Law Advice during the Crunch
If your business relies on borrowing to continue to operate successfully, you may find your options limited. You may think that asking your lawyer for advice would be fruitless but Cousins Business Law have come up with some tips to help your business survive.

The old adage ‘Turnover is vanity, profit is sanity but cash is reality’ has never been more relevant. Your lawyer can improve your cash position in a number of ways:

  • By helping you negotiate and/or draft important contracts so as to enable you to be paid interim payments on a long project and to avoid damaging disputes arising;
  • By drafting your standard terms of business so that they maximise your chances of being paid and on time;
  • By negotiating commercial agreements and contracts on your behalf to ensure that payments to you are guaranteed if possible, for example, by ensuring payment obligations are protected by bonds or guarantees;
  • By resolving contractual disputes where you are owed money in a quick and cost-effective way;
  • By advising you of your legal obligations in relation to your creditors and what to do if insolvency threatens;

Contact Cousins Business Law on 0121 778 3212 or email us here with your enquiry.

Also read – The Best Options in a Falling Market on the Cousins Business Law website for advice to developers on how they can continue to profit in the current climate.

Legal Update

Getting to Grips with the Companies Act

Gary CousinsApril 2008 saw the second installment of the Companies Act 2006 come into force – the final parts won’t apply until October this year.

Gary Cousins highlights the provisions of particular importance for SMEs.

Company Secretaries
The requirement to have a Company Secretary has now become voluntary for private companies.

What this means for you:

  1. Companies incorporated after 6th April 2008 can chose whether or not to have a company secretary when they form;
  2. If your company was in existence before 6th April 2008, you can abolish the role of company secretary, but this might mean changing your Articles of Association.
  3. If you do abolish the role of company secretary, you must file notice with Companies House (Form 288b).
  4. If a company doesn’t have a company secretary, any documents that previously needed to be served on them can now be served on the company itself, or would still be valid if addressed to the ‘Company Secretary’.
  5. If you abolish the role of company secretary, then all the legal requirements of the company secretary (keeping the statutory books and records, filing accounts and annual reports, giving notice of meetings, etc) pass to the directors.

Annual Accounts and Reports
The time limits for filing annual accounts and reports to Companies House has now been reduced from 10 months to 9 months.

What this means for you:

  1. Make sure your annual accounts and reports are prepared in time - otherwise you are committing a criminal offence as well as it  affecting your company’s credit rating;
  2. Remember to get the board of directors to approve the accounts – a single director doing so without approval of the board might be committing a criminal offence;
  3. Remember to send them to all your shareholders, debenture holders and anyone else entitled to be given notice of general meetings, at the same time as filing them.
Cousins in the News Gary Cousins and Steve Petty of Cousins Business Law

Gary Cousins ready to get out and do the business - Birmingham Post Apr 16 2008

(picture shows Gary Cousins, rear and Steve Petty, front)

Plain English Legal Advice

Taking on a New Commercial Lease

Commercial Property lawyer Steve Petty advises anyone about to sign a new lease to stop and consider 5 crucial areas:

  • The condition of the property – to avoid having to pay for excessive repairs
  • Alterations you intend to make – have you got permission to carry them out?
  • The nature of your business – do you have the necessary planning consents?
  • Service charges – do you know exactly what you’ll be paying in the future?
  • Termination rights – can you end the lease before the term expires?

Full details on what to take into account can be found in this article on our website – What to look out for when taking on a new lease.

For advice on commercial lease arrangements, whether you are a landlord or tenant contact Steve Petty.

Useful Links

On-line Courses in Intellectual Property from the British Library
The British Library has launched a series of online courses to help entrepreneurs and small business owners get to grips with intellectual property. Users need to register their details before they can take the courses.

Free safety guides for small businesses
The SafetyGuru website has a range of risk assessment forms you can download and use.  The cover a wide range of sectors from small office based businesses to tree surgeons.

Litigation Madness

It’s said that Britain is becoming more litigious but luckily we have a long way to go before we reach the litigation madness of the United States where in 1992 a 79 year old lady spilled a cup of McDonald’s coffee in her lap and was awarded $2.9 million in damages.

If you have a story of litigation madness to share we’d like to hear it.  Email your story to Gary Cousins here.

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Cousins Business Law is a member of the Law Society & regulated by the Solicitors Regulation Authority. Head Office: Swan House PO Box 11543, Birmingham, B13 0ZL. Tel +44 (0)121 778 3212. Fax: +44(0)121 275 6155