The Small Business, Enterprise and Employment Act 2015 (the “Act”) received Royal Assent in March 2015 and is being implemented in stages. Some of the most significant changes from our clients’ perspectives are those affecting company procedure and governance and will come into force during the course of 2016. Precise dates have yet to be determined but over the coming months, we can expect to see:
- The abolition of bearer shares – all existing bearer shares in UK companies must be surrendered and exchanged for registered shares by 26th February 2016. This follows the requirements earlier this year that companies had to give notice to the holders of any bearer shares of their rights to surrender their shares by 26th June 2015 and surrender them by 26th December 2015. Any companies retaining bearer shares from 26th February 2016 will need to apply to the court to have them cancelled.
- The register of people with significant control – the requirement that UK private limited companies maintain a ‘register of people with significant control’ will be implemented in April 2016. The register will contain details (including names, service addresses, nationalities and dates of birth) of people and legal entities who meet certain conditions for exercising ‘significant control’ over a company. The ultimate owners and decision-makers in relation to a company will need to be disclosed and not just the company’s immediate shareholders or parent companies. By June 2016 the registers will need to be made public and will be searchable by individual names and company names.
- The abolition of annual returns – with effect from June 2016, UK companies will no longer be required to submit annual returns giving details of their shareholders, officers and share capital. Instead, they will be required to submit a confirmation statement at any time within a 12 month period confirming that they have delivered all required information to Companies House.
- The abolition of corporate directors – with effect from October 2016, subject to certain exceptions that are not yet finalised, companies will be prohibited from having corporate directors and will need to replace corporate directors with individuals.
The aims of these measures and the Act in general are said to be to increase transparency and accountability, to make it easier to determine who actually controls a company and also to streamline company procedure. The changes, particularly the introduction of ‘registers of people with significant control’, will fundamentally change the disclosure requirements and shine a spotlight on the ultimate beneficial owners of companies and individuals and entities that exercise control of companies. We encourage our clients to start thinking now about the scope and implication of these requirements.
Please contact the partner at Hunters having responsibility for your legal matters, or (for new enquiries) please contact a member of our Business Services team, in order to discuss how these anticipated legislative changes will affect your company or business interests.