Posted on 11.1.16 by Rowan Uren
2016 will see the implementation of significant changes for companies brought about by the Small Business, Enterprise and Employment Act 2015 (“the Act”) which is aimed at increasing corporate transparency and simplifying filing requirements at Companies House.
Directors and secretaries need to understand the new rules and how they will apply as soon as possible. Set out below is a summary of some of the key changes and important dates to be aware of.
New Public Register for “People with Significant Control”
From 6th April 2016 UK companies will be required to keep a register of those people who have significant control over the company (this will be called a “PSC Register”). A person with significant control is defined in the Act as a person who, in respect of a company, directly or indirectly:
- Holds more than 25% of the shares in that company;
- Holds more than 25% of the voting rights in that company;
- Holds the right to appoint or remove a majority of the company’s directors;
- Has the right to exercise significant influence or control over that company;
- Has the right to exercise significant influence or control over a trust, and that trust meets one or more of the conditions above in relation to that company.
Companies will be required to investigate, obtain and update information on potential individuals that meet the criteria and to provide this information to Companies House from 30th June 2016.
Replacement of Requirement to File Annual Return with Annual “Confirmation Statement”
The existing form of Annual Return is to be replaced by a new annual “Confirmation Statement”, this is expected to be in effect from 30th June 2016. A copy of the company’s PSC Register will also need to be filed at Companies House along with the Confirmation Statement.
Option to use a Central Register at Companies House in place of Statutory Books
Private companies will have the option of keeping/maintaining the information that was previously required to be kept in a company’s statutory registers (commonly known as the company’s “Statutory Books”) at Companies House centrally from 30th June 2016, therefore dispensing with the need to continue maintaining a physical set of Statutory Books as has traditionally been the case.
Prohibition on Corporate Directors
Corporate Directors are limited companies that are appointed as a director of another company. Following implementation of the Act it may no longer be possible to appoint a Corporate Director and any appointment made in contravention of this rule will be ineffective, unless an exception applies. The exceptions are likely to be limited and have been under consultation, with further regulations expected to set out the detail. The general prohibition is anticipated to take effect from October 2016 (although this date is provisional). It is also expected that there will be a transitional 12 month period for existing Corporate Directors, at the end of which, unless an exception applies, any remaining Corporate Directors will have to have been replaced by natural directors (i.e. individuals).
To discuss any issue covered by this note, please contact Rowan Uren or any other member of the Corporate / Commercial Team on 0343 507 5151.