Update to Small Business, Enterprise and Employment Act 2015

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Companies House have today published a revised implementation plan for the Small Business, Enterprise and Employment Act 2015 (SBEE).

The main headlines are that the implementation of the following elements of SBEE are being pushed back.

Abolition of corporate directors

It has now been confirmed that this will be pushed back to October 2016, after Companies House initially changing the implementation date to either April or October 2016. The regulations governing this element of the legislation are currently being drafted, following a consultation on the draft regulations earlier in the year.

We know that there will be a number of exceptions to the general rule, but these are yet to be confirmed. One option discussed at a recent Companies House event was the possibility that corporate directors may be appointed where the corporate director itself has only human directors. This may widen the scope of the exceptions considerably. As and when we have any updates, we will publish them.

Director disputes and 'Consent to Act'

Measures to aid the resolution of director disputes (where a director has been appointed to a company without their consent) have been pushed back to December 2015.

This ties in with the removal of the 'Consent to Act' on director appointment forms. Currently, when a new director is appointed, a company must either supply three pieces of information on that director (mother's maiden name, town of birth etc.) if filed electronically, or have Form AP01 signed by both the new director and an existing officer of the company if filed on paper. From October 2015, this element will be removed and replaced with a 'Statement of Truth' from the company confirming that the director has consented to act. Companies House will also be contacted each new director to confirm their appointment. If the appointment is fraudulent, directors will (from December 2015) have the ability to apply to the Registrar to have their appointment removed. Companies House will also be recommending that companies maintain their own 'Consent to Act' document to defend against any applications to the Registrar where a legitimate appointment has been made.

Registered Office disputes

Measures to aid the resolution of registered office disputes (where an address is being used as a registered office without consent) have been pushed back to December 2015.

Where a complaint is made to the Registrar that an address is being used as a company's registered office without the owner's consent, Companies House will attempt to contact the company to make them aware of the complaint. Clearly, if letters are sent (which is Companies House usual method of communication with companies), they will be received at the current registered office address. Companies House also have the ability to write to the directors at their service address, but again this could also be the registered office of the company. Companies House expect that companies will keep their own affairs in order, and should notice a change in registered office, or a lack of correspondence from the Registrar.

After attempts are made to contact the company, and if no response is received, the registered office of the company will be moved to the main Companies House office for that jurisdiction i.e. companies registered in England & Wales will be moved to Cardiff, companies registered in Scotland will be moved to Edinburgh etc.

The motivation for giving the Registrar this power to change the registered office of a company is to protect individuals who are having their postal address targeted by companies fraudulently changing a company's registered office to their home address. This dispute mechanism therefore will not extend to third parties (such as lawyers or accountants) who have disputes with companies regarding the provision of registered office services. These are viewed by Companies House as purely contractual between the company and the third party, and Companies House will not intervene.

General implementation

We will be publishing more material on SBEE in the run up to the first implementation date of October 2015. Currently, the only elements of the Act due for implementation on this date are:

- Suppression of the Day of Date of Birth for directors (although we are already seeing suppression on the new Companies House Service site);

- Accelerated Strike-Off, bringing the time it takes to strike a company off down from approximately 4 months to approximately 3; and

- Changes to the 'Consent to Act' as it becomes the 'Statement of Truth', as set out above.

We will be publishing regular posts and circulating literature on all of the changes as and when we receive information on them. If you would like more information on any elements of the act, please contact Lewis Eggerton, contact details below.