Legal Update - Small Business, Enterprise and Employment Act

Article

25 June, 2015

Following on from our previous article on the Small Business, Enterprise and Employment Bill, which can be found here, the Act has now been passed - with some of its provisions already in force.

As of 27 May 2015, the statutory directors duties apply not only to formally-appointed officers, but also to shadow directors. Individuals who do not wish to be caught by the provisions of sections 170-177 of the Companies Act 2015 should therefore be wary of straying from a position of distanced oversight to a more involved role whereby they are a person "in accordance with whose directions or instructions the board is accustomed to act."

The prohibition on corporate directors was due to come into force in October 2015, with existing corporate directors to be removed by October 2016. However, the Department for Business, Innovation, and Skills has recently announced that the implementation of these restrictions will be delayed until 2016. There are some caveats to the rule and the government is currently consulting on an exception which will allow companies to be appointed to the board of their subsidiaries.

A change which is still expected to come into force in October 2015 will remove the requirement for a director to provide written consent to act as a director. The company will instead file a statement with Companies House advising that the director has consented to act. Companies House will then notify the director who can apply to be removed from the register if he has not, in fact, provided consent.

Companies should also put a note in their diaries for January 2016, when they must draw up a public statutory register of People with Significant Control over the company.

The abolition of the Annual Return - and the introduction of its replacement the Confirmation Statement - is expected in April 2016.

For further information please contact Pauline Rigby, Head of Corporate and Restructuring at Forbes Solicitors on 01254 222399 or contact Pauline Rigby by email.

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