With the beautiful weather we have been experiencing of late it is easy to look forward to the summer and forget the woes of winter.
However, the prospect of a “No Deal” Brexit looms, and it seems for many companies in the UK kicking off their shoes, letting their hair down and concentrating on their main goal is a long way off. Instead, they are bracing themselves for the exit position and ready to press the button on the plans should a “No Deal” rear its ugly head and throw more turmoil into the mix.
In order to assist, Companies House have issued some preliminary guidance on what will be the case if we leave the EU without a deal and it makes for rather bleak reading. This will affect the following companies: Societas Europaea, European Economic Interest Groupings, companies with EEA corporate offices, any company involved with cross border mergers and EEA companies with a base in the UK.
For some of the above, it is simply a matter of providing more information. After the deadline at 11.00 p.m. on 29 March this year, EEA companies with a base in the UK will become subject to the same reporting requirements as overseas companies. Similarly, EEA corporate officers will have to provide additional information after that time to include, name, registered office, legal form, governing law and registration number. These are relatively easy to comply with.
More stressfully, Companies House indicate that any UK companies who are currently conducting cross border mergers will have to have those completed and registered by 29 March 2019. Anyone who has ever been involved in that sort of merger knows that this is no small matter so there are several cross border advisers losing sleep about this as we speak.
Of most concern, however, is the guidance given to Societas Europaea and European Economic Interest Groupings. As at 29 March they will simply not be capable of being registered in the UK. The options for them are fairly stark. They can go, they can convert to a UK PLC, or do nothing and automatically become a UK Societas on 29 March 2019. At that point its options are to remain as a UK Societas, wind up or convert to a PLC but it loses its ability to move out of the UK. Of course, whatever these entities choose to do, they have to make that decision and complete the process within the next month. Neither process is straightforward and is likely to take a considerable amount of time and professional fees. The one bright star in all this is that Companies House do have a very efficient and friendly help line to assist with the exit arrangements. So rather than preparing ourselves for the brace position as we crash land we can perhaps glide unscathed to a new position in the very near future!