Further to our update in the June newsletter following the government’s response to the consultation, Philip Patterson highlights some of the key changes which are proposed.
Currently the UK Small Business, Enterprise and Employment Bill is in draft form. Once the regulations are finalised - expected to be in the first half of 2015 - there will be a grace period to adopt the changes and TMF Group’s company secretarial team will share our thoughts on the impact of the changes and action to be taken.
Introduction
The Small Business, Enterprise and Employment Bill (the “Bill”) was introduced to UK parliament by the government in June 2014. It sets out a number of proposals, including changes to both the Companies Act 2006 and the Company Directors Disqualification Act 2006.
Information on beneficial ownership
UK companies (other than companies which already report under the Disclosure and Transparency Rules (DTR5)) will be required to create and maintain a register of ‘persons with significant control’ (“PSC”), with the intention that this register will be made publicly available provided the inspection is for a "proper purpose". A PSC register should include any person who holds 25% or more of the issued share capital of a company, or who exercises 25% or more of the voting rights, or who is entitled to appoint or remove a majority of the board of directors or any person who can exercise ‘significant influence or control’ over the company. At least annually, companies will be required to file details of their PSC register along with the new confirmation statement, envisaged as replacing the annual return.
Removal of the requirement for companies to file an annual return
The annual return with a set date will be replaced by a confirmation statement, which must be filed not more than 12 months from the previous statement of confirmation, incorporation or annual return. The filing period for the confirmation statement is reduced to 14 days from the existing 28 days for the annual return. The statement must confirm that all information required to be delivered by the company in respect of the relevant period has been delivered. Information includes changes to the registered office address, directors and company secretary’s details, directors’ residential addresses, statement of capital, details on register of members and of the PSC register.
Option for private companies to keep statutory information on a central register
Private companies will have the option to keep certain statutory registers on the central register, kept by the Registrar of Companies, instead of keeping their own registers. The scope of the information includes the registers of members, the PSC register, the register of directors, the register of directors’ usual residential addresses and the register of secretaries. A company may only elect to keep its register of members on the central register if all members agree.
Statement of capital
The format of the statement of capital is to be simplified, removing the requirement for companies to include the amount paid up and unpaid on each share and requiring companies to specify the aggregate amount unpaid on the total number of shares.
Abolition of bearer shares
It is proposed that the Companies Act be amended to prohibit the issue of further bearer shares and call in existing bearer shares for cancellation in exchange for registered shares. Failure to surrender bearer shares in time may lead to their cancellation.
All company directors to be natural persons
All directors will be required to be natural persons. Existing companies will have 12 months to comply and once this 12 month period has passed, any director appointment that is not a natural person will automatically cease.
Consent to act as director
The existing requirement for new directors to provide confirmation of consent to act will be replaced with a requirement for the company to make a statement that the appointee has consented to act. The Registrar of Companies will send a notice to any newly appointed director. Any person appearing on the public register as a director will be able to apply to have their name removed if they did not consent to act.
Protection of date of birth information
Complete date of birth information held by the Registrar of Companies will no longer be made available to the public (just the month and year) to make identity theft more difficult. Companies will still need to send the Registrar full details of the dates of birth of their directors and PSCs and this information will remain available for inspection on the register held by the company.
Shadow directors
The statutory duties of directors are to be extended to apply to ‘shadow directors’. Any person who exerts control over the board of directors of a company will need to be aware of and comply with the statutory duties imposed on directors.
Directors’ disqualification: new powers of the Secretary of State
The Secretary of State will be able to apply to the court for a disqualification order in respect of a director who has been convicted of certain offences overseas corresponding to an indictable offence under the law of England and Wales (or Scotland).
Read the response to the consultation and the draft Bill.