The Small Business, Enterprise and Employment Bill (the Bill) is currently making its way through Parliament and includes measures intended by the government to improve corporate transparency, increase trust in UK business and simplify company filing requirements. The main corporate aspects of the Bill are set out in Part 7 (Companies: transparency), Part 8 (Company filing requirements) and Part 9 (Directors' disqualification regime).
We reported on the background to the Bill in our July newsletter. The article can be found here.
One of the more significant features of the Bill is the proposal to require companies to keep a register of people with significant control over a company (the PSC register). This is intended to improve transparency in the ownership and control of companies. An individual may be a PSC through ownership of shares or voting rights or the ability to appoint or remove directors.
In our November newsletter we reported on the Discussion Paper issued by the Department of Business, Innovation and Skills (BIS) looking at how the nature of control should be recorded on the PSC register and the government's objectives. The article can be found here.
Revisions to the Bill and timing
After receiving its third reading in the House of Commons, the Bill was reprinted on 19 November. Of the parts of the Bill concerning corporate matters, only the transparency provisions have been amended to any significant extent. The requirement to maintain a PSC register has been the subject of widespread criticism on the grounds that it will impose an administrative burden on legitimate businesses without operating as an effective deterrent to the illegitimate activities at which it is directed. Unfortunately the changes in the latest draft are essentially drafting refinements rather than any substantive change to the thrust of the proposals.
The Bill has now moved to the House of Lords and had its second reading on 2 December and now moves into Committee in early January. BIS anticipate the Bill will receive Royal Assent by March next year and Companies House recently issued some provisional information on the likely implementation timetable. Changes will be brought in in three tranches with those with the highest impact (the PSC register for example) coming in the final tranche, with implementation of all changes expected to take about 18 months from Royal Assent.