Small Business, Enterprise and Employment Bill
Improved transparency or a regulatory burden?
The Small Business, Enterprise and Employment Bill is currently completing its passage through Parliament and will be implemented on a phased basis, starting later this year.
The Bill covers numerous new legislation designed to improve transparency, make it easier for small businesses to grow and compete (primarily through improving access to finance) and deter the use of UK companies for criminal activities, illegal financing and tax evasion.
The proposed changes are far reaching and will involve amendments to the Companies Act 2006 and insolvency legislation. The company law provisions will be of particular significance to General Counsels, Company Secretaries and those charged with implementation of the new requirements.
Company law measures at a glance
In summary the main company law changes will include, but are not limited to:
- Requiring most companies to maintain a Register of Persons with Significant Control (a PSC Register);
- Amending statement of capital requirements regarding share premium paid on shares;
- Rebranding the Annual Return as the ‘Annual Confirmation’;
- Enabling private companies to have information currently held on their statutory registers kept by Companies House;
- Enabling objections to be made regarding the use of an address as a registered office;
- Prohibiting the use of bearer shares; and
- Prohibiting the use of corporate directors, subject to certain exceptions.
What do these changes mean in practice?
Companies of all sizes will need to pay careful attention to the maintenance of their company details. Specifically, they will have an obligation to identify those with significant interests and will need to be proactive in notifying changes in shareholder control. The requirement for the PSC Register to be made available for public inspection is particularly significant. Those responsible for implementation will therefore need to ensure that they are well-informed of the rules.
The government has published a provisional plan for rolling out the company transparency and filing provisions. The plan proposes a staged implementation through to April 2016.