29th September 2015
The Small Business, Enterprise and Employment Act 2015 – key upcoming changes
The Small Business, Enterprise and Employment Act 2015 received Royal Assent on 26 March 2015 and is being implemented in stages over the following 15 months. The primary purpose of the Act is to enhance the transparency of UK company ownership and control, in order to ensure the UK is considered a safe and trusted place to do business, but is also designed to reduce red tape whilst improving the quality of publicly available information.
The upcoming key changes the Act will bring about are summarised in brief below. The next implementation date is on 10 October 2015 when changes to disclosure of directors’ dates of birth, an accelerated strike off procedure and the consent to act regime for directors and secretaries will come into force. Companies should consider the aspects that affect them now and take steps to prepare for the upcoming changes.
10 October 2015
Consent to act as a director or secretary
Directors and secretaries will no longer need to sign their appointment forms; instead a statement from the company that the director or secretary has consented to act will be included on the relevant form. Companies House will then contact proposed directors directly notifying them of their appointment and giving them the opportunity to object if they did not consent to it. However the notification and removal procedure is not planned to be implemented until December 2015.
Directors’ dates of birth
The day element (but not the month or year) of a director’s date of birth will no longer need to appear on the public register.
Strike off procedure
The time it takes to strike a company off the register will be reduced so that a strike off could happen within approximately three and a half months (as opposed to the current six months).
Registered office disputes
The registrar will be able to change a company’s registered office address to one of its own offices if it receives a complaint that a third party’s address is being used without consent.
Persons with significant control (PSCs)
Perhaps the most key aspect of the Act is the introduction of the PSC register, which will create a publically accessible register of the individuals who have significant control of UK companies. Broadly speaking a PSC is an individual (or certain corporate entities) who own more than 25% of the share capital, hold more than 25% of the voting rights, directly or indirectly control the composition of the board or who directly or indirectly exercise (or can exercise) significant influence or control over the company. Guidance is yet to be issued on the meaning of “significance influence and control”.
All companies will be required to keep a register of PSCs from April 2016 onwards, in preparation for the need to file this information at Companies House from 30 June 2016.
Check and confirm
Instead of the current obligation to file an annual return each year, the Act will require that each company ‘checks and confirms’ its information by filing a ‘confirmation statement’, and notification of any changes, if necessary, at least once every 12 months.
Private companies will be able to opt to keep certain information on the public register at Companies House only, instead of maintaining internal statutory registers.
The disqualified directors’ regime will be updated and strengthened, including the ability to disqualify a director on the grounds that they have been convicted of certain offences overseas, including an indictable offence in connection with receivership of company’s property or promotion, formation, management, liquidation or striking off.
A prohibition on appointing corporate directors will be introduced with some limited exceptions. Any company with an existing corporate director will need to take action, to either explain how they meet the conditions for an exception or give notice to the registrar that the person has ceased to be a director.
We will publish regular and more in depth updates on the progress of the implementation of the Act. In the meantime, if you would like further information on the Act and how it might affect you and your business, please contact a member of the Hamlins Corporate Team.