UK company law - an update on implementation of key changes
Author: Iain Butler and Sian Sadler
Applies to: England and Wales
The Department for Business, Innovation & Skills has released a provisional timetable for implementing key corporate changes to be introduced by the Small Business, Enterprise and Employment Bill.
Following publication by the government of its plans to increase the transparency of UK company ownership in June last year, the Bill is currently making its way through parliament and is expected to receive Royal Assent in March.
The key dates that directors and company secretaries need to be aware of are:
- 2 months after the new legislation comes into force - bearer shares, which have been historically used for structuring and UK tax planning, will no longer be able to be created. Any existing holders of bearer shares will have 9 months from this date to surrender their shares so that they can be converted into registered shares
- October 2015 - subject to certain exceptions (see below), the appointment of new corporate directors will be prohibited. Any existing corporate director appointments will automatically cease 12 months after this date
- January 2016 - UK companies will be required to keep and maintain a new publicly accessible register of persons with significant control (PSC register)
- April 2016 - the requirement to file information from the PSC register at Companies House will come into force, changes will be made to the information required in statements of capital, annual return filings for UK companies will be simplified so that companies will only be required to check and confirm that all information required to be filed at Companies House is up to date each year, and companies may take advantage of new rules which allow them to keep statutory registers (such as the register of members) at Companies House
Other measures coming into force as part of this timetable include those intended to aid resolution of company registered office and director disputes, suppression of the 'day' element from directors' dates of birth on the public register of directors and the speeding up of the strike-off process (all proposed to be implemented in October 2015).
The government is currently considering the responses to its consultation on exceptions to the proposed ban on corporate directors. In its discussion paper, it identified that it was minded to continue to allow corporate directors to be appointed in the case of, amongst others, pension trustee companies. The outcome of the consultation is expected soon.
The government has also published draft terms of reference for a working group to provide:
- non-statutory guidance for companies to support their understanding of the new requirement to keep a PSC register
- statutory guidance on the meaning of 'significant influence or control' in the context of the PSC register
It is proposed that the guidance will be published by October 2015 at the latest in order to ensure that companies are familiar with the legislation prior to the proposed January 2016 implementation.
This plan shows that the government is keen to introduce measures to improve the transparency of UK company ownership as soon as possible and all UK companies, particularly those with large or complicated corporate group structures, should start to consider carefully how they will deal with the proposed changes. It is expected that more information about updated Companies House procedures and filings processes will be made available closer to the relevant implementation dates.
This document is for informational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given.