27 March, 2015
The Small Business, Enterprise and Employment Bill has recently been approved by both the House of Lords and House of Commons. The Bill, which makes significant amendments to the Companies Act 2006, the Insolvency Act 1986, and the Company Directors Disqualification Act 1986, simply awaits the formality of Royal Assent before coming into force.
The Bill will implement a raft of changes to current legislation, from director disqualification through to annual returns. Whilst these changes to the Companies Act are expected to impact on all companies, it is hoped that the effect of the new legislation will be to reduce the regulatory burden imposed on smaller businesses.
We have selected the most relevant amendments and detail these below.
The nature of directors
It is now a requirement that all directors must be a natural person. As such, corporate directorships will cease within 12 months of the new section coming into force. Any attempt to appoint a corporate director will be void.
Significant changes have been made to the regime of disqualification, widening the scope for disqualification.
Streamlined strike off
The Registrar of Companies will now be able to strike a company off within around 4 months. The Registrar will need to wait only 14 days to publish a notice in the Gazette, after sending its second communication to clarify if the business is still in operation. And only 2 months will need to elapse following the Gazette notice before the company can be struck off.
PSCs - the new VIPs?
A new part will be inserted in the Companies Act 2006., which will apply to most private limited companies. An important introduction is the requirement of such companies to hold a public, statutory register of People with Significant Control (PSC register) over the company. This register should be available for inspection at the company's registered office. A person will be classed as a "PSC" if they meet a number of conditions, depending upon their circumstances. For instance, the following will be classed as PSCs:
Filing is dead. Long live filing!
There will no longer be a requirement to file an Annual Return. However, in its place will be a new obligation to provide Companies House with a Confirmation Statement, which will explain that the company has duly filed all information it was obliged to within the previous 12-month period. Companies have the opportunity to file the necessary notifications at the same time as the confirmation statement, if they have omitted to do so previously. Such information as the change of a registered office; changes to the register of directors, company secretaries, people with significant control; details of a single alternative inspection location; and obligations arising out of a company's decision to use the central register.
A further filing change is in relation to statement of capital. It will not be necessary to state the amount paid up and the amount unpaid for each share. The new requirement is to state, if any, the aggregate amount unpaid on the total number of shares in the company.
Companies will now have the option to use the Registrar of Companies' central registers to hold statutory information. As such, the Registers of Members, Directors, Directors' Residential Addresses, and Secretaries will not need to be recorded in separate statutory books if this option is elected.