Hi Bryan
The following is quoted verbatim from my contact who is a senior law
partner in the UK.
<<Directors are in breach of their Companies Act duties if they fail
to complete annual returns correctly and are liable to fines, although
that's seldom enforced.
Unless stamp duty is paid, share transfers cannot be validly
registered by the company. But stamp duty can be paid late (subject
to penalties which can be imposed by the Stamp Office before the
transfer is stamped). Once it's paid, the transfer can be registered
and then (assuming it's not a forgery) it's effective. If the
transfers have been backdated for some fraudulent purpose, minority
shareholders or others affected by the fraud might be able to bring an
action but without knowing more it's a bit hard to speculate.>>
I hope that the above helps to keep you one step ahead of the
opposition! In the meantime, you might find the following links
useful as further background research in relation to your question
content.
1. The Company Directors & Secretaries Guide as published by Companies
House as at August 2003. A very useful guide outlining directors and
secretaries duties as well as key points in relation keeping registers
and other documents. You can download it (as an Adobe document)at:
http://ws2.companieshouse.gov.uk/notes/gba1.pdf
2. The Inland Revenue's guide on Stamp Duty Interest and Payments
which states, among other things, that there is a 30 day time limit
for getting documents stamped. Thereafter, liability arises and one
can expect to pay interest and late penalty charges. You can view the
guide at:
http://www.inlandrevenue.gov.uk/so/so10.htm
3. A brief note from the Association of Private Client Investment
Managers and Stock Brokers entitled "Best practice code agreed to
tackle share frauds". Although it is dated as at 2001 and deals with
the issue of fraudulent share transfers from a broker's perspective, I
believe it will provide some useful background for you. An excerpt
from the note: "The practice is believed to have cost the retail
stockbroking industry up to £2 million in recent months in a number of
fraudulent transfers - several of which are expected to result in
criminal prosecutions." You can view the note at:
http://www.apcims.co.uk/public/news/releases/2001/15oct01.asp
4. A newsletter produced by the City Information Group
(see http://www.cityinformation.org.uk/) entitled "Review, Reform and
Regulation: Planned accounting standards and disclosure requirements
post Enron and Worldcom and the impact on information professionals".
One of the many points that the article addresses is the need in the
UK for proper accountability in relation to documents such as UK
Annual returns. Some excerpts from the article:
"In a bid to prevent an “Enronesque” style disaster in Europe,
European Union finance ministers are considering toughening the rules
on financial analysts, markets and corporate governance. Ministers
have asked corporate law experts to develop proposals for improved
transparency and closer surveillance of organizations and their audit
practices, as well as a “lessons learned” report.";
"Although the UK has different conditions in place regarding
accounting practices and financial regulation to the US and to other
parts of Europe, there is little doubt that a crisis similar to Enron
or Worldcom could develop in the UK. With this mind, the Financial
Services Authority (FSA) and the government’s Company Law Review are
looking at ways of reform, taking a “prevention is better than cure”
approach."
There's no actual date on the newsletter but footnoted references seem
to indicate a year date of 2002. You can view the newsletter at:
http://www.cityinformation.org.uk/Newsletter/Review%20Reform%20Regulation1.doc
Kind regards
jem-ga :)
Google Search Strategy for provided links:
Keywords used: "Stamp Duty on Share Transfers in the UK"; "Directors'
Duties UK"; "Fraudulent Share Transfers UK" |
