The Small Business, Enterprise and Employment Bill (the Bill) which is making its way through Parliament includes measures to improve corporate transparency, increase trust in UK business and simplify company filing requirements. We have reported previously on the proposals and details of the overall aims of the Bill from a corporate perspective can be found in our July newsletter, the plans for a register of people with significant control in our November newsletter and details of the consultation on exemptions to the prohibition on corporate directors in our December newsletter.
The Department of Business, Skills and Innovation (BIS) has now published a provisional plan for implementing Parts 7 (the transparency provisions) and 8 (company filing requirements) of the Bill. The Bill has finished the Lords' Committee stage and is now moving to the Report Stage. BIS is hoping for Royal Assent before the dissolution of Parliament on 30 March.
Following Royal Assent, the Bill will come in in phases:
Two months from Royal Assent - companies will no longer be able to issue bearer shares and the nine month period for companies to convert existing bearer shares will commence
- the prohibition on corporate directors, with exceptions (still to be finalised), will come into force
- as will measures to aid resolution of company registered office and directors disputes, measures to speed up the striking off process and to suppress the 'day' of birth from the date of birth of directors on the public register
companies will be required to keep a register of people with significant control (PSC Register) although they will not be required to file the information at Companies House until April 2016
- the requirement to file information on people with significant control at Companies House will come into effect
- changes to the statement of capital will come into effect so that only the aggregate amount of unpaid on shares needs to be provided
- the confirmation statement, which replaces the annual return, comes into effect which is the requirement to 'check, notify changes if necessary and confirm' statutory information at least once in a 12 month period
- private companies will, from this date, be able to opt not to keep certain statutory registers but instead to keep information on the public register at Companies House instead, and all companies will be able to put certain optional information on the public register
The BIS provisional implementation plan can be found here.
Government response on the PSC Register
The Government has issued a written ministerial statement following responses received to the BIS discussion paper issued in October which set out how it was proposed that the PSC Register would work (as mentioned above, the details were covered in our November newsletter).
Views were sought on the statutory and non-statutory guidance proposed to help support understanding of the new requirements, how control should be recorded on the PSC Register and what the process should be by which people at serious risk of harm should be able to apply to have their information protected from being a matter of public record by being on the PSC Register.
The statement says that:
- a working group is to be established to oversee the development of the non-statutory guidance. The group will be drawn from a broad group including business representative bodies and civil society groups and is to be chaired by Peter Swabey of the Institute of Chartered Secretaries and Administrators. Draft terms of reference for this group have been published on the BIS website
- a panel of company law specialists will form an 'expert working panel' to draft the statutory guidance required to set out what is meant by "significant influence or control" in the context of the PSC Register
- on the questions of recording control on the PSC Register, the approach to be taken is that people will need to state which one of the "specified conditions" for being a person with significant control they meet with the aim of ensuring consistency of information in the register and clarity for companies and others
- in relation to the circumstances in which individuals will be able to apply to have their information suppressed from public disclosure, the present intention is to limit this to apply only in cases where individuals are at serious risk of violence or intimidation as a result of a company's activities. It is not intended that it will be possible in cases where the risk is economic loss
- applications for the suppression of information will be allowed to be made by third parties on behalf of people with significant control, such as legal advisors. Applications will also be able to be made in advance of becoming a PSC so that the protection is in place from day one.