TT240: Company Law Changes

April 28, 2016
Company Law Changes

Scheduled Company Law changes in 2016

Subsequent to the Small Business, Enterprise and Employment Act which received Royal Assent in March 2015, some of you may have already started noticing the changes in Company filings like Director’s date of birth suppression; company strike-off accelerated, consent to act checkbox for officers etc.

The following are further scheduled changes:

April 2016

Director disputes

Companies House has started writing to all newly appointed directors to make them aware that their appointment has been filed on the public register and explain their general legal duties. If any Director was to dispute their appointment, the company in question would be asked to provide evidence that the director ‘consented to act’ in their appointment. If sufficient evidence isn’t provided, this would result in the director’s appointment being removed from the register. This proof might be that the company has retained a statement from the director that they have ‘consented to act’.

Registered office address (ROA) disputes

In the event of a dispute, the Registrar can nominate a default address for each jurisdiction (England and Wales, Scotland or Northern Ireland). Any post sent to a company at the default address will be held at the relevant Companies House office. Companies House offices won’t receive packages or bailiff visits for companies whose ROA has been changed to a default address.

Acceptable evidence that a company has the right to use an ROA might be a document that shows it is a building the company owns, one they rent, or an agreement from the owner that they are allowed to use the address as an ROA.

People with significant control (PSC) register

Companies, LLPs and Societates Europaeae (SE) need to keep a register of people with significant control (‘PSC register’) from 6 April 2016. A PSC is anyone in a company, LLP or SE who meets one or more of the following conditions:

  • owns more than 25% of the company’s shares
  • holds more than 25% of the company’s voting rights
  • holds the right to appoint or remove the majority of directors
  • has the right to, or actually exercises significant influence or control
  • holds the right to exercise or actually exercises significant control over a trust or company that meets one of the first four conditions.

Protecting PSC information

  • The PSC’s usual residential address won’t be available on the public register, and the date of birth will be suppressed. All other PSC information will be available on the public register, much like directors and members details are currently held. In certain exceptional cases it might be possible to apply to have your details protected, but this must be done as soon as possible.

June 2016

Confirmation statement

From June 2016, the Annual Return is being replaced with the ‘confirmation statement’ which must be filed at least once a year. You need to ‘check and confirm’ the company information held at Companies House is correct and notify them if there are any changes.

This can be updated as many times as needed in a year. There’ll be a yearly fee to pay with the confirmation statement.

Unlike the Annual Return, there will be no set date each year on which the confirmation statement needs to be made. Instead there is a rolling 12 month window which means that a company can combine making a confirmation statement with another filing at any point during the year if this is administratively easier.  The company will not then need to make another confirmation statement for a further 12 months.

The confirmation statement will cover broadly the same areas plus further notifications in respect of the PSC register and if Companies House has been elected to maintain the registers (see below); a confirmation that all such information has been provided.

PSC’s to be filed with Companies House

  • The information on Persons with significant control would need to be filed with Companies House on incorporation and updated with submissions of ‘confirmation statements’.
  • It will be a criminal offence to not provide this information. If you discover you don’t have a PSC, or are still trying to identify one, there’ll be forms you’ll need to file to confirm this.

Company Registers

Private companies will be able to opt to keep certain information on the public register, instead of holding their own statutory registers. This will apply to registers of:

  • members
  • directors
  • secretaries
  • directors’ residential addresses
  • people with significant control (PSC)

If your company elects to hold registers information at Companies House, this becomes part of the public record and hence is available for inspection by anyone via the Companies House website.

Statement of Capital

Statement of capital will be simplified. The changes remove the requirement to show the amount paid up and unpaid on each share. Instead, the aggregate amount unpaid on the total number of shares needs to be notified. This figure is more useful for shareholders and creditors as it shows money which is still due to the company. Companies need to provide a full statement of capital where changes have been made during the year.

October 2016

Corporate directors

A ban on most corporate directors of companies is coming into force from October 2016. Corporate directors will have a period of time to resign (and perhaps be replaced by a natural person). Post October 2017 the appointment of any remaining corporate directors will automatically terminate. There would be a few exceptions, however the true impact and details of this are being considered following a public consultation by BIS.

The suggestion is that companies will still be able to appoint a corporate director if that corporate director only has natural persons as its directors and certain details about those individuals are publicly available.

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