IRIS prepares for all possible Brexit outcomes as crunch point nears
Published 8 March 2019
Editor's note: Since this blog was published, MPs have rejected Theresa May's deal and voted to rule out the UK leaving on a 'no deal' basis.
Britain is set to exit the European Union in just three weeks but, incredibly, we still don’t know what position we’re going to be in come March 30 – the day after.
Next week, we expect to see the next crucial ‘meaningful vote’ by MPs. While the result should shed more light on what’s going to happen next it could equally muddy the waters further.
Anything could happen
What could happen? Here are a few of the main possibilities:
- Theresa May’s deal is voted through in the House of Commons
- We leave with no deal
- EU agrees to extend Article 50 and delay Brexit
- MPs vote for an alternative plan, such as ‘Norway Plus’, dubbed a ‘soft Brexit’, where the UK would maintain a close relationship to the EU and single market
- MPs vote for a ‘final say’ referendum that could, ultimately, keep the UK in the EU
At the moment, the most likely possibility for the short term appears to be that MPs will vote to delay Brexit – maybe for a few months, maybe even longer. It seems extremely unlikely that the Prime Minister’s deal – resoundingly defeated only weeks ago - will garner enough support, with no apparent changes to the Irish backstop.
A no deal scenario is still very much on the cards, however, with the fact remaining that, it is enshrined into law, on the statute books, that we will leave on 29 March.
Yet, it is very possible that any of the permutations outlined above or, indeed, others could still come into play. It’s fair to say we are in unchartered territory.
Companies House prepares for no deal
The implications, whatever the outcome is, are clearly enormous for businesses, whose bosses are waiting anxiously with bated breath.
The Government has published lots of guidance in the last few weeks about the important area of company registrations.
Although it says Brexit will not affect how most UK companies report information to Companies House, it has stated that if we leave without a deal, an organisation may need to change its company registration if it is:
1. a European entity formed under EU law
2. a UK company with an EEA corporate officer
3. a UK company involved in a cross border merger
4. an EEA company
Also, post-Brexit, some European entities formed under EU law will no longer be able to be registered in the UK. These entities are:
• European public limited liability companies, known as ‘Societas Europaea’ (SEs)
• European Economic Interest Groupings (EEIGs)
• Making arrangements before the UK leaves the EU
SEs and EEIGs registered in the UK can make alternative arrangements before 29 March 2019. For example, an SE can convert to a UK public limited company (PLC) if it has been registered for at least two years or has had two sets of annual accounts approved. This conversion must be completed before 29 March 2019.
SEs and EEIGs can also move their seat of registration from the UK to another EU member state. This must be completed before 29 March 2019.
SEs and EEIGs that have not made alternative arrangements before 29 March 2019 will be automatically converted into new UK corporate structures. This means they will still have a clear legal status after the UK leaves the EU.
Companies House has outlined changes to various forms in the event of the UK leaving the EU without a deal. See these here:
IRIS prepares with software update
At IRIS, we’ve been working diligently to ensure that we have all bases covered. Our team have been looking closely at the knock on effect for our IRIS Company Secretarial software and the potential ramifications for Companies House and surrounding legislation.
We are working very closely and directly with Companies House so there’s no delays in filing forms. We will release a software update a few days before 29 March, with the ability to switch it on at whatever point Brexit happens, if indeed it does happen at all.
But we are preparing for the possibility that we do leave the EU on 11pm on 29 March with no deal and the new software will reflect that. We are changing forms and the electronic submissions of these forms to prevent rejections in the no deal scenario.
IRIS developers are also working to update PTP Share Register and Keytime Company Secretarial in the same way.
So, no matter what happens, we will be able to adapt and serve our customers appropriately. Whether we leave with no deal, Brexit is delayed, or indeed never happens, IRIS software will be compatible with the outcome.
Everyone is hoping for clarity and certainty on Brexit soon, but this wish seems unlikely to come true. In all probability, things will rumble on for some time yet. In the meantime, we will continue to prepare for all outcomes!