With effect from next year, two changes to company law will be introduced which will impact on a company’s statutory registers (otherwise known as company books). This article will highlight these changes and what they mean for your business.

  1. A new way to keep statutory registers

What is the current requirement?

At present, all companies are required by law to keep certain registers. These include:

  • The register of members.
  • The register of directors.
  • The register of directors’ residential addresses.
  • The register of secretaries (if the company has a company secretary).

These registers must be kept up to date and at the company’s registered office (or at another address notified to Companies House). 

What is changing?

Private companies will have the option to elect to keep the information that must be recorded in some or all of these statutory registers on the central public register maintained by Companies House instead of maintaining their own separate registers.

When does this change take effect?

It is currently anticipated that companies will be able to take advantage of this change from June 2016.

What is the advantage of making the election?

The change is designed to reduce the administrative burden on private companies.  If you make the election then you will not have to update these registers yourself (although you will still have to notify Companies House of any relevant changes to the information). 

What do you need to do?

If you are happy to continue keeping your own statutory registers, you don’t need to do anything.  However, if you wish to take advantage of the change there will be a number of steps you will need to take including, notifying Companies House and, in the case of the register of members, seeking shareholder approval.

  1.  New register of persons with significant control

What is the current requirement?

There isn’t one; this is a completely new requirement.

What is changing?

All companies (apart from certain public companies) will be required to keep a register of persons with significant control (a “PSC Register”).

The provisions relating to the PSC Register are quite complex and we are awaiting further guidance from the government in respect of them.

The PSC Register will include details of individuals and legal entities which have significant control over the company.  Companies will also be required to make this information public by filing it at Companies House.

Very broadly speaking, a person has significant control if he or it:

  • Holds, directly or indirectly, more than 25% of the shares or voting rights in the company.
  • Holds the right, directly or indirectly, to appoint or remove a majority of the board of directors of the company.
  • Has the right to exercise, or actually exercises, significant influence or control over the company, or
  • Exercises or has the right to exercise significant influence or control over a trust or firm, which itself meets any of the above conditions.

Companies will be under a duty to take reasonable steps to identify people with significant control and to keep the PSC Register up to date.  People with significant control will be under a corresponding duty to notify the company of their interest.  In both cases, failure to comply is an offence.

As with the other statutory registers mentioned above, it will be possible for private companies to opt to keep the information on the central register at Companies House instead of maintaining their own separate PSC Register.

When does this change take effect?

It is currently anticipated that companies will be required to start keeping their PSC Register in April 2016.  However, they will not be required to file the information at Companies House until June 2016.

What do you need to do?

For many companies this new requirement may not actually create that much additional work.  For example, in most small private companies the people who are the registered shareholders are the only people interested in the shares and while it will be necessary to include in the PSC Register the details of any shareholder who owns over 25%, this should be quite straightforward.  Things will be more complicated where shares are held on behalf of others, for example, through trusts.