Contrary to much discussion around the legislation, it is not all negative for credit professionals. In some areas, the Act increases accountability and access to limited liability data. This is particularly pleasing to see after a period in which many in the profession believe the responsibilities associated with the privilege of limited liability have been watered down.

Generally regarded by the profession as unhelpful, are the changes around the filing of director’s addresses.

This contentious aspect can evoke strong sentiment on both sides of the argument. The Act will enable director’s of limited companies to file a service address alongside their residential address.

The residential address will be withheld from the public register and only available to credit reference agencies and public bodies. This might not sound so bad, but credit reference agencies are working to determine what they will be able to display within the body of a commercial credit report.

Clearly the agency will still be able to identify the director, behind the scenes, but it is unlikely that they will be able to carry on displaying the home address within the report. It may be possible to implement a consent basis for viewing this data – not too dissimilar to that in place for consumer credit checks. This is permissible within the strictures of the Act. But, it will soon no longer be possible to view director’s addresses in a directory format.

The service address seeks to address the risks for a director in publicising their home address. It is undoubtedly influenced by the activities of animal rights campaigners towards directors of research laboratories and the ongoing threat of terrorism.

Shareholders will also enjoy some protection, with addresses on the register of members only being available from the company for a ‘proper purpose’. The future of the members address on the public register is currently under consultation, but there is hope the DTI will recognise the importance of this information for matching and credit referencing. Otherwise, this change would dilute the power of such data for credit risk assessment.

Another change which seems to be less than welcome in the credit management profession concerns the status of Company Secretary. It will no longer be necessary for limited companies to appoint one and this means that a company can effectively be run by a sole director. This feels like accountability and decision making within the company will be undermined. The challenge for credit management is how to interpret this in risk assessment – will points need to be deducted in the instance of a sole director?

Transparency and accountability generally serve the credit risk assessment process well and the Act is quite beneficial in other areas.

Although marginal, the reduction of the time limits on filing is welcome. Private companies will now need to file within nine months of year end (previously ten months) and Public companies will have six months (previously seven). Contrary to early indications there is also no increase in the audit threshold. This is good news for the currency and validity of data in credit assessment.

Also helping the cause are the changes for companies sitting within groups where related companies operate in regulated markets. These companies will no longer be able to take advantage of the small company filing regime. Even better, but still cloudy and unformed, is the suggestion that small companies should file a turnover figure.

The use of electronic shareholders reports is positive and should mean that data is available sooner - and more easily captured by credit reference agencies.

The appointment of a ‘Senior Statutory Auditor’ is welcome and this appointment will be fully visible in the public register. Planned changes to Companies House documents seem sensible too. Rather than being numbered, forms will be titled in such a way to make it clear what they are for.

Probably best news for credit management though, concerns changes in the responsibilities of Companies House. The government will enjoy wide reaching powers to appoint purpose and duties for Companies House. This will include annotating the register in certain circumstances. So, in cases of known fraud – such as company hijacking – Companies House will change the public register information. It will also enable edits to be made to improve legibility. The situations where this will apply will be clear cut cases requiring no proof.

The Companies Act 2006 is a bit of a mixed bag for the commercial credit industry, but it’s least favourable aspects are perhaps offset by a raft of changes which will improve accuracy, currency and accountability elsewhere.