The Small Business, Enterprise and Employment Act is here, and there are a few changes taking place! If you’re a business owner and a registered company of Companies House, at least some of these changes will affect your business over the next two years. The changes to the Small Business, Enterprise and Employment Act are aiming to reduce red tape whilst also increasing the quality of information on the public register. It also aims to enhance transparency and ensure the UK is seen as a trusted and fair place to do business.
As it stands, the changes are expected to be spread over 3 stages, with the changes that have the highest impact being delivered in the final stage. The changes will impact on legal requirements on companies, including what they file with Companies House, which will in turn impact on companies’ systems and processes.
So what’s going to be changing?
Some of you may already be aware of this, but from the 26th May this year, share warrants to bearer (known as ‘bearer shares’) were abolished. Any existing share warrants will need to be surrendered within 9 months.
October will see a partial suppression of date of birth on the public register; therefore directors’ and shareholders’ birthdays will only show the month and year they were born, suppressing the day element. This is being done to prevent identity theft among other fraudulent activity.
There will also be an accelerated strike-off time as of October within the changes of the Small Business, Enterprise and Employment Act. The strike off process aims for the right balance between deciding to remove a company from the register if it’s no longer doing business, and giving creditors time to come forward and register an objection. The time it takes to strike off a company will be reduced from no longer than three months to no longer than two months after the first Gazette notice, (as long as there are no objections from creditors).
Finally, October will see a replacement of the ‘consent to act’ procedure for newly appointed directors and secretaries. Companies House will now add a statement to the relevant appointment and incorporation forms (paper and electronic) that the person has consented to act in their relevant capacity. Companies will be required to agree to this statement and Companies House will write to all newly appointed directors to make them aware that their appointment has been filed on the public register and explain their statutory general duties.
December will bring a simpler way to get falsely appointed director details removed from the register under the Small Business, Enterprise and Employment Act. If a director does not consent to act in their appointment, they can dispute it as a director and it will be dealt with quicker under the new changes.
Another change will be to ‘Registered office disputes’. A new process to provide a remedy where a company is using an address for its registered office but never had authorisation. This will ensure better validity in companies addresses.
In April, the changes ask for Companies to start keeping a register of people with significant control in their business, ready for them to be filed at Companies House when the changes come into play from 30th June, 2016. This will be called a ‘PSC Register’ and will be filed at Companies House on incorporation and updated at ‘check and confirm’.
June will see the most changes for the act at the same time. Filing an annual return will be replaced by filing a ‘confirmation statement’ which companies are required to ‘check and confirm’ the company information.
A change to company registers will also be introduced, with private companies being able to opt to keep certain information on the public register only, instead of statutory registers. This will apply to the registers of members, directors, secretaries, directors’ residential addresses and persons of significant control.
The disqualified directors’ regime will be updated and strengthened, and there will be a simplification of the statement of capital and consistently throughout the Act.
October 2016 will see a prohibition on appointing corporate directors introduced, with some limited exceptions. Every company must have at least one natural director, so if your company does have an existing corporate director, you will need to take action. You can either apply to explain how your corporate director meets the conditions for an exception, or you can give notice to the registrar that the company has ceased to be a corporate director.
Towards the end of the year, a few more changes will be made to the act. Companies will be able to deliver certain categories of optional information to the registrar is one of them, and the act has promised there may well be more changes yet to be published, so watch this space!