Here is a reminder on some of the recent changes brought in or due to be implemented under the Small Business Enterprise & Employment Act 2015 (“SBEEA 2015”);
Changes from 10/10/2015
Accelerated Strike-Off for Companies:
As of 10/10/2015 the strike off period for a company which has had first notice of dissolution published in the Gazette (Companies House will post this notice) is reduced from 3 months to 2 months.
This means that by the end of 2 months from that date, if no objection is received, Companies House will dissolve the company and remove it from the Companies Register.
It is therefore very important that Company records are kept up to date, especially accounts, shareholder registers and statements of compliance (which are replacing annual returns – see below).
New Director Offences
Two new offences have been added to the list for potential disqualification orders;
1. Disqualification for offences committed abroad – if on reasonable discovery offences known to be committed by the director aboard, whether criminal or civil in nature may be taken into account and cause a director to be struck off or prevented from acting as a director in the UK – therefore KYC on directors when acting for companies is essential due to this change.
2. Disqualification of persons instructing unfit directors – if a director is disqualified because of the influence or control another person holds over that director, then that other person can also be disqualified from acting as a director – this is important to bear in mind when dealing with significant shareholders who act as de-facto or shadow directors in a business, even though they themselves may not be appointed as a director formally.
Changes from 04/04/2016
One of the biggest changes coming into force from the above date is the introduction of a Persons with Significant Control register at Companies House. This applies to shareholders in companies and to an extent partners/members in an LLP.
This information will need to be filed at Companies House from 30/06/2016.
From 30/06/2016 onwards, any person/corporate entity which holds;
– More than 25% shares
– More than 25% voting rights
– Holds the rights to remove/appoint majority of directors
– Otherwise exercises the full control over a company
Will be required to be added to the PSC register by the directors/secretary of the Company.
There will be exceptions once the law is implemented in April 2016. The proposed exceptions are contained in this document, linked here – https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/498275/Statutory_company_PSC_Guidance.pdf
Other than the PSC’s residential address, all other details required by the register will be publicly available information – BE AWARE.
This will also be applicable to LLP’s in certain ways and relevant government guidance has been produced on this – https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/495414/LLP_Statutory_Guidance_for_PSC_register.pdf
For LLP’s the proposed guidance is as follows;
A person with significant control for an LLP will be when;
1. They have rights to more than 25% of the assets on winding up of the LLP
2. They hold more than 25% of the voting rights
3. They have the right to appoint/remove the majority of the management.
4. They have significant overall control of the LLP
Changes from June 2016;
Confirmation Statement – These are replacing annual returns.
Now, company directors/secretary must file an annual statement of compliance which is their confirmation that any and all filings at Companies House, updates to registers – e.g. PSC register, shareholders, directors etc. have been completed, and annual accounts filed.
Changes from October 2016
Prohibition on Appointment of and Removal of Corporate Directors
In October this year it will become prohibited to appoint a corporate entity as a director of a company based in the UK. There will be some very limited circumstances published in due course which allow for these to remain.
Any company with an existing corporate director will by October 2016 either need to explain to Companies House how they satisfy the conditions for allowing a corporate director to remain or give notice to Companies House that the corporate director has been removed and submit the relevant forms.
A failure to do so can result in Companies House taking remedial action against the Company, including automatic removal of that director, fines for directors of the company generally and sanctions or in extreme cases, suspension from the register with potential for striking off/notice of dissolution for non-compliance.
It is best to ensure when dealing with companies as clients that these changes are born in mind. Client companies are required to comply with these changes and it can affect your relationship with clients if you are aware of non-compliance for the above.
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