April saw the latest tranche of measures from the Government’s Small Business, Enterprise and Employment Act (SBEE) coming into force.
The Act is a key part of the Government’s overarching project to make the UK the ‘most attractive place to start, finance and run a business’. Given Royal Assent in March 2015, the Act has a long list of new provisions that are coming into force in stages. Last year measures on bearer shares, directors’ personal information, accelerated strike-off of a company and consent to act as a company officer were brought in.
This month sees further key aspects of the Act go live.
Directorships
Following on from last year’s measure to ensure individuals do actually consent to their appointment as company officers, this latest part of the bill gives anyone named as a director against their will, or without their knowledge, the right to apply for the relevant notification to be removed from the companies register. If the company cannot supply sufficient evidence that the individual did in fact consent to the appointment, their name will be removed.
Registered Office Address (ROA)
Companies House will now be empowered to investigate any complaints about companies or LLPs making incorrect or unauthorised use of an address. If the complaint is found to be valid, Companies House will have the power to change a company’s ROA to a default address.
People with Significant Control (PSC)
Perhaps the most controversial aspect of the legislation is that the people with significant control in a private company or LLP are to be named on a public register – though this information will not include a residential address or date of birth, giving important data protection benefits.
The register must now be kept up-to-date of the names of all people with what the Act describes as ‘significant control’ over the business. The SBEE defines a PSC as a person who:
(i) owns more than 25% of the company’s shares; or
(ii) holds more than 25% of the company’s voting rights; or
(iii) holds the right to appoint or remove the majority of directors; or
(iv) otherwise has the right to exercise, or actually exercises significant influence or control; or
(v) holds the right to exercise, or actually exercises significant control over an arrangement that is not a legal entity, such as a trust, but would satisfy any of the other conditions if it were an individual.
This information must be kept from 6 April this year and submitted to Companies House from 30 June. The register cannot be blank. If you have taken all reasonable steps and are confident that there are no individuals or legal entities which meet any of the conditions (i) to (v) in relation to your company or LLP, you must enter that fact on the PSC register.
This is an important part of the legislation and failure to comply with it could constitute a criminal offence for company officers and PSCs alike.
Just around the corner, in June, a further set of measures from the SBEE will come along. A confirmation statement will replace the annual return. There will be a new requirement to ‘check and confirm’ the information that is held at Companies House. Companies can opt to keep some of their information on the public register rather than on holding their own statutory registers. The statement of capital will change from the requirement to show the amount paid up and unpaid on each share to show instead the aggregate position. This will help shareholders and creditors by showing the money still due to the company.
From October a new prohibition on appointing corporate directors will be introduced. It will allow limited exceptions. Any company with an existing corporate director must either explain how they meet the conditions for an exception or give notice that the entity has ceased to be a director.
You can find Wilkins Kennedy on Egham High Street and The Mount in Guildford, so if you have any questions in relation to the Small Business, Enterprise and Employment Act, then why not pay us a visit or give us a call today?