Important changes to Company Law are coming: Be aware and get prepared
Important changes affecting Company Law in the areas of company records, filings and the appointment of directors, amongst others, which have been provided for in the Small Business, Enterprise and Employment Act 2015 (the Act) are now starting to come into effect. Companies need to be aware and start getting prepared
All companies will be affected to some extent by the provisions of the Act because it changes the filing requirements for companies. Set out below are the current expectations for implementation of the most important of the changes, which have been put back a few months from the original planned implementation dates. The plan is still to bring in the changes in stages, with some already having happened in May this year, and with the biggest changes coming in later next year, but the latest timetable could move again depending on how the secondary legislation progresses through parliament.
In May we saw the abolition of bearer shares but this only affected a small number of companies as the vast majority of private companies don’t have bearer shares. If in doubt, take a look at your Articles of Association to see whether they include the right to issue bearer shares (companies with standard Model Articles would not be able to issue bearer shares) and check your register of members.
In October the most notable change being brought in for Directors and Secretaries to note will be a change in the way directors and secretaries consent to act in these positions when first appointed. Going forward, Companies House forms will contain a statement that the director or secretary has consented to act in this position, which will replace the current system of providing signed forms and pieces of personal information by way of identification. Companies House will also now write to newly appointed directors and secretaries to advise them of their appointment and their statutory duties.
December will see a simplification of the procedures for getting falsely appointed directors removed from the register and for dealing with companies using unauthorised registered offices. At present a court order is usually required to rectify the register if you find another company is using your building without permission as its registered office, so an easier way to stop that will be welcome.
The requirement to keep (at the registered office) a register of “people with significant control” (the PSC Register but known also as the register of beneficial owners), will come in from April 2016 (rather than January), but the information will not have to be filed with Companies House until 30 June 2016. Whilst in most cases determining who is a PSC should be relatively straightforward because it will be those people owning more than 25% of the shares, we are still awaiting guidance (due next month) on precisely what else may constitute “significant influence or control”. The information on the PSC Register held at Companies House will need to be updated via the “check and confirm” system that is coming in from June 2016 (and which system will also replace the current requirement to file an Annual Return).
The option to do away with keeping separate registers (members, directors etc) at the registered office in favour of keeping all the information at Companies House will be available from June. The important thing to bear in mind with this is the fact that if you opt not to keep the separate registers at the companies registered office then all the information on the records at Companies House will be viewable by the public (full date of birth of directors for example) so give some thought to this before dispensing with the separate registers. Changes to the statement of capital will come in at the same time.
The prohibition on Corporate Directors will now come in from October 2016. We are still awaiting details of how the prohibition will work as the Government (BIS) was swayed by the feedback from its initial consultation into thinking that corporate directors may have more value than they first realised. It may be the case that we see them allowed if all the directors of the corporate director are individuals (not companies for example) and the corporate director is formed in a country (such as England) where the identity of the individual directors is publicly available, rather than seeing a blanket ban with limited exceptions which is what was originally planned.
We will keep you updated with the changes as and when they are due to come in and give you full details for the requirements for the PSC register and the final position on corporate directors when these are published.
If you would like more guidance or information please contact Philippa Ward.