Changes to company law in the UK to be implemented
Last year the government introduced the Small Business, Enterprise and Employment Bill which is designed to improve the legislative environment for small businesses and to enhance transparency of UK corporate ownership.
The Small Business, Enterprise and Employment Act 2015 has now received Royal Assent and it will be implemented over the next 12 months.
The key changes are:
- a requirement for companies to keep a register identifying persons who have significant control over the company. Such information is to be kept available for public inspection and will be known as the ‘PSC Register’;
(For this purpose a person will be deemed to have significant control if they own or control more than 25% of a company’s shares or voting rights, or otherwise exercise authority over the company and its management.)
- a prohibition on the use of corporate directors by UK companies (subject to some limited exceptions);
- the current requirement for an annual return to be replaced with an obligation to confirm at least once in every 12 month period that all the requisite information has been given to Companies House;
- to give private companies the option of holding information required by certain statutory registers on a public register instead;
- the current requirement for the statement of capital to specify the paid up and unpaid amounts on each share to be replaced by an obligation to state the aggregate amount unpaid on the total number of shares; and
- the creation of new bearer shares will be prohibited and existing bearer shareholders will be required to surrender their shares in the company in exchange for registered shares. (Bearer shares are shares where legal title is evidenced by possession of the certificate and not the entry of the owner’s name in the register of members. Therefore ownership of bearer shares can be transferred by a simple transfer of the certificate to another person without the company’s knowledge.)
The Act also aims to clarify and update the conditions for disqualifying directors who are guilty of misconduct and will therefore amend the Company Directors Disqualification Act 1986.We're here to help