The Small Business, Enterprise and Employment Act 2015 (Act) came into legal effect on 26th March 2015 and it affects the way that UK companies operate.
Launched following the publication of a Department of Business, Innovation and Skills (BIS) consultation paper in 2013, different parts of the Act are being implemented from now until April 2016, on a rolling basis.
A number of changes have been made in order to improve the overall level of corporate transparency for UK businesses, including: corporate directors being banned; bearer shares being stopped; and a requirement being in place for firms to keep an up-to-date register of individuals having significant control over a company – also known as a ‘person with significant control’ (PSC) – which must also be available to members of the public.
Companies will have a duty to maintain a PSC register from January 2016, and it needs to be physically available for inspection at the company’s registered office or another preapproved location. There is also the option for private companies to file PSC information at Companies House.
The responsibilities of shadow directors have also been made clearer as part of the changes, while the steps that have to be taken for the submission of annual returns and other company filing duties have also been updated.
Complex rules now govern bearer shares, which UK companies are banned from creating, and for those companies with shares of this type still in circulation they must either be cancelled or converted into non-bearer shares.
As part of this process, information needs to be given to the Registrar of Companies, including a copy of the order and a statement of capital, and public companies may be forced to re-register as a private company before the cancellation can be registered, in certain circumstances.
The new rules also mean that if a company appoints a corporate director they risk being punished by a fine, while companies that currently have corporate directors have one year from the rule being implemented to remove them (the exact implementation date in 2016 is yet to be confirmed).
The Act means that companies will not have to file an annual return, but they will have to submit a confirmation statement to Companies House, stating that it has complied with all information submission rules for the preceding 12-month period. The confirmation statement has to be with Companies House no later than 14 days after the end of the corresponding review period.
For information regarding who qualifies as a PSC in a company and what information needs to be contained in the register, and for guidance on all other changes that will be implemented as part of the Act, companies are being urged to seek professional legal advice to ensure they comply with legislation and avoid the possibility of incurring any penalties.