Easing the statutory administration burden via SBEEB
Following on from the enactment of the Companies Act 2006 which aimed to cut administration for small businesses, the Small Business Enterprise and Employment Bill is currently making its way through Parliament.
You may have heard of the Small Business Enterprise and Employment Bill (the Bill). This Bill will have an impact in some shape or form on every limited company and limited liability partnership on the Register, be it large or small, limited by guarantee or by shares, charitable or academy trust. Whilst the detail and timescales have yet to be fully finalised, implementation will begin in 2015 and the main points will have been implemented by the spring of 2016.
Introduction of the Register of Persons with Significant Control
The Bill will introduce a new statutory register for all companies, the Register of Persons with Significant Control. Persons with Significant Control are those individuals or corporate entities primarily holding 25% of the shares or voting rights (amongst other criteria) in a company. This Register will consist of the names, date of birth, nationality, country of residence, home address, service address, date acquired the relevant interest in the company and details about that interest. The information will be available to the public although we understand that residential addresses will be able to be withheld from public access. From the date of introduction there will be a grace period during which time companies can gather this information on the relevant persons prior to the deadline for filing such information with Companies House.
Annual Return changes
One of the main changes which will affect all companies and LLPs is that the current system of filing an annual return will be replaced by a "Confirmation Statement". We believe the Confirmation Statement will be similar to the current annual return in that it will show the same details, still attract a fee and still be required to be filed once in every twelve month period. However, it is anticipated that it can be filed at any time during the twelve month period and will not be linked to a particular date.
Changes to how a director's date of birth is shown
The Bill is also aiming to place additional security on the personal information Companies House make publically available about Directors. Directors can already take their residential address off the public record by the filing of a service address. The Bill aims to take this a step further by no longer making public the day of the date of birth. A Director will still be required to give this information to Companies House, but only the month and year of the date of birth will be available on the public record so as to reduce the potential for identity theft.
Companies will be able to hold their statutory registers at Companies House rather than at their registered office or other inspection location. Again this will be one of the last changes to come into force and is not anticipated prior to the spring of 2016. The practicalities of how this will work, the information that will be available and in what format is not currently known. In particular it is not clear how information which can currently be kept out of the public record will be dealt with. This will effect information such a director's residential address and date of birth, and a member's residential address.
It will remain the responsibility of the company to ensure that their statutory registers remain correct and up to date, whether held at Companies House or at their registered office or alternative inspection location. It remains to be seen whether company will still be able to apply the proper purpose test for people wishing to inspect or copy their statutory registers, if they are made available at Companies House. Companies wishing to hold their registers at Companies House should have their members/shareholders pass a unanimous resolution to do so. Once clearer guidelines are in place we will of course make this information available.
Abolition of Warrant Shares
The first of the changes to come into force will not affect the majority of companies but nevertheless will be an issue for some. This relates to bearer or warrant shares. We understand this change is expected to be introduced two months after the Bill receives Royal Assent and will mean that companies will no longer be able to issue these shares whilst the holders of existing bearer or warrant shares will be given nine months in which to surrender and exchange these for registered shares.
Abolition of Corporate entities acting as directors
A further major change will affect those companies who have a corporate director; that is a legal entity such as a limited company who acts as a director of another company. The concept of a corporate director, which had already been amended under the Companies Act 2006 will be removed although there will be some exceptions which are yet to be confirmed. Once confirmed, Companies with corporate directors will need to check whether their corporate directors fall within those exceptions or replace them with a human director.
If you are concerned about the effect that the Bill could have on your company, please do not hesitate to contact a member of the company secretarial at email@example.com, or further information is available at both the Companies House website and also the Business, Innovation and Skills website.
There are more issues which will be covered by this Bill and more information will follow as it becomes available.