Small business, enterprise and Employment Act 2015 - 10th October 2015 update!

On 26 March 2015, the Small Business, Enterprise and Employment Act 2015 received Royal Assent. The purpose of the Act is to “[improve] the wider business environment in which all businesses, particularly small businesses, operate.” On 10^th October 2015, the Small Business, Enterprise and Employment Act 2015 (Commencement No 2) Regulations 2015 brought in a number of changes to the Companies Act 2006.

Directors

Section 1087 of the Companies Act 2006 has been amended to allow the omission of the day of the date of birth of directors on the register available for public inspection. The forms for filing with the Registrar of Companies have been updated to reflect this.

A further change can be found when appointing a new director or company secretary. It is no longer a requirement that the “consent to act” is confirmed on the forms by way of the new director/secretary’s signature. Instead, the company is required to confirm that the person has consented to act in that capacity.

In addition, the Registrar of Companies will now notify the new director of the registration of their appointment, and provide them with guidance and information about their duties and role.

Company Strike Off

The time after which the Registrar of Companies can strike off a company from the register have been reduced meaning that the overall period can now take approximately 4 months instead of 6. Additional communications can now be sent to the company after 14 days (rather than 1 month) and the Registrar can now strike off a company after publication of notice in the Gazette for 2 months, rather than 3 months at present.

Moving Forwards

December 2015

Measures relating to director and registered office disputes will come into force. This will allow for a simpler way to remove directors’ details from the register if they have been falsely appointed, and to provide a remedy where no authorisation was given for a company to use a particular address for its registered office.

Next year

April 2016

From April 2016, Companies will need to keep a PSC Register in preparation for 30 June 2016. As of 30 June, companies will need to keep a register of people with significant control, with the first filings of such information to be made as part of the new obligations replacing the annual return (see below).

The Financial Conduct Authority already has in place the Disclosure and Transparency Rules for publicly traded companies, so this provision extends the requirement to smaller businesses. The requirements for private companies however are more onerous, as a company will be required to identify, investigate, obtain and maintain information on individuals with significant control.

A person with significant control is an individual who owns or controls (directly or indirectly) more than 25% of a company’s voting rights or shares, or who otherwise may exercise his right to take control over the company or its management. The register will need to contain the individual’s name, date of birth, nationality, address, and details of their interest in the company.

June 2016

A Confirmation Statement, or “check and confirm” will replace the annual return. This statement will include confirmation by the company that the appropriate and necessary filings have been made throughout the previous 12 months, and detail any changes to information which may have been previously filed.

In order to simplify things further, the statement of capital will only require the aggregate amount unpaid on the total number of shares, rather than the amount paid up and unpaid on each share.

In addition, the PSC Register will now need to be filed and updated with the Confirmation Statement from 30 June 2016.

October 2016

As of October 2016, the appointment of corporate directors (save for specific circumstances) will be prohibited. For companies with existing corporate directors, the exceptions must be considered, or corporate directors must be removed and replaced by individuals. The Secretary of State will, under the new section 156B, have the power to make regulations setting out the exceptions, but none are specifically set out in the Act at present. The transition period for the removal of corporate directors, as set out in s156C, will be one year from the coming into force of s156A of the Act (October 2015), which states that directors must be natural persons subject to any exceptions. After this time, if a corporate director fails to come within the scope of one of the exceptions (to be defined) it will cease to be a director.

Ahead of October 2016, any company with a corporate director will need to consider these provisions and take action.

What does this mean for you?

The new requirements that will be coming into force may prove problematic or onerous for some companies. Technical statutory guidance on the new provisions will and is being issued however this could still be particularly challenging for those companies with complex ownership structures in place.