The Small Business, Enterprise and Employment Act became law on 26 March and brings significant changes to the disclosure requirements of private companies, as well as altering the position of both corporate and shadow directors.
KEY CHANGES TO CONSIDER
New PSC Register – People with Significant Control
From January 2016, companies will be required to complete and maintain a new public register, setting out those persons with “significant control” over the company, and this will need to be filed at Companies House from April 2016. The register is to include personal details (name and address, date of birth), the date on which that person became registerable (i.e. obtained significant control) and the nature of their control or interest in the company.
What is meant by “Significant control” is, broadly speaking, those having (either alone or jointly with others):
It also includes those who have the right to exercise “significant influence or control over the company”. Quite what is meant by this is uncertain and will no doubt be addressed in the supporting guidance and be the subject of expert discussion. The spirit of the new register is, however, clear – companies are to disclose who owns and controls them, including whether this is through a trust, nominee agreement or shareholders agreement. It is quite likely that many of these existing arrangements / agreements were intended to be private, so companies will need to consider any implications of this register.
Annual Returns and Company Books
Companies will no longer need to file annual returns as of April 2016. Instead, companies are to provide a confirmation statement to Companies House affirming that they have delivered all information required for the preceding year(which will include details of any change to their registered office or the company registers).
Also from April 2016, companies will have the choice of alternate record keeping, so instead of housing the statutory registers in company books, companies can keep the information at Companies House. This change will no doubt make life easier for many companies.
The Act abolished the issue of new bearer shares with effect from 26 May 2015 and holders of existing bearer shares have 9 months to surrender these for conversion into registered shares. Any bearer shares not surrendered will need to be cancelled by the issuing company.
Corporate Directors and Shadow Directors
The Act requires all directors to be natural persons. From April 2016, no new corporate directors can be appointed, and after the transitional phase of a year, any remaining corporate directors will be automatically abolished. This will impact particularly heavily on group companies, dormant companies and those used by trusts. There may be some limited exceptions, which are currently being debated in a Government consultation process. Finally, the general duties of directors will now also apply to shadow directors.
Points for companies to consider:
For further information, please contact Jonathan Waters, Corporate Partner at Hay & Kilner
Call: 0191 232 8345