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More transparency, and Corporate Directors no more. Small Business, Enterprise and Employment Act 2015 – what do you need to do now?

Kelly Craig guides small businesses through the Small Business, Enterprise and Employment Act in her latest blog.

For those who are already company secretarial clients of ours, you will appreciate that I have a particular interest in the excitement of Companies House filing requirements!

The Small Business, Enterprise and Employment Act 2015 (which received Royal Assent on 27 March) cannot go unmentioned, in the main because of the regulatory requirements it will introduce in the fullness of time.

  1. The Act has 11 parts, but for the sake of brevity, sanity and usefulness we can restrict our attention to just a couple of headline sections:-
    The most controversial of the changes is the introduction of the Register of people with significant control (“PSC Register”). In short, a PSC is anyone who can exercise control over a company, which may be by virtue of shareholdings and voting rights (being 25% or more of those shares/rights) or power to appoint and remove directors. The register must contain similar information to that normally contained in the register of members. However, there will be the additional requirement to record the date on which the beneficial interest was acquired and the nature of that interest. Furthermore, there are offences introduced in connection with failure to maintain the register, request and/or provide information from or to the relevant parties. Both the company and every officer of the company can be guilty of these offences and a prison sentence and/or fine may be imposed.
  2. Corporate directors are to be abolished. Any existing appointments must be resigned. Failure to do so is a criminal offence and may result in imprisonment or fines for those guilty of failure to comply. Interestingly, corporate members of limited liability partnerships are not captured by this prohibition, but the position will be under review to ensure that these appointments are not simply used to circumvent the new rules.

Happily, (for many companies I expect) the time scales for implementation of these changes has been moved. For the PSC register this has changed from January to April 2016, with filings at Companies House from 30 June. The prohibition of corporate directors has been moved from last month to October 2016.

With the potential criminal law implications in mind, this is a good time to (re-)consider whether your company has anything to report in relation to PSCs and/or to nominate “natural people” to replace any corporate director appointments currently in place.

The adjusted start dates also emphasise the importance of having or retaining a company secretary to monitor these types of changes, even if such an appointment is no longer legally required for your company.

If you have any concerns about your company’s regulatory requirements please feel free to get in touch with one of the team. Kelly Craig, Angus McGuire or Alan Stalker. 

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