The Act applies to limited companies, limited liability partnerships (LLPs) and Societas Europaea (SEs), and will introduce a raft of measures designed to streamline company filing procedures, bolster growth for UK businesses and promote transparency.
A wealth of information on what companies need to do, and how, to comply with – and fully benefit from – the Small Business, Enterprise and Employment Act is available on the Companies House website.
Here are the key highlights of what entrepreneurs and small businesses, as well as their advisers, need to know.
Simplified company filing requirements
The government has committed to improving the accuracy and integrity of the public register, as well as simplifying filing requirements for UK small businesses.
To achieve this, the annual return is – from 30 June – being replaced by a confirmation statement. More specifically, companies will now just need to confirm that any and all existing information held by Companies House is correct, or provide the most updated information, on at least a once yearly basis.
Information which must be reviewed, confirmed or updated includes details of registered office, director (or member) and location of registers, shareholder information, statements of capital and industrial classification code. All this goes hand in hand with a once-a-year fee, regardless of how many times a confirmation statement is filed.
People with significant control (PSC)
In order to achieve greater transparency, a new requirement for a register of people with significant control (PSC) has also been introduced. This includes any individuals who hold morethan 25% of company shares or voting rights; have the right to appoint or remove the majority of directors; or have significant influence or control over the company, or a trust or firm which has such control. This new register needs to have been kept from 6 April.
Companies need to take reasonable steps to find out if there are people who are suspected to have significant control, including contacting them to confirm whether they’re a PSC. If confirmed, companies must obtain the required information and record it in their PSC register. This process also applies to companies owned or controlled by legal entities that fit one of the criteria above, which will be known as a ‘registrable relevant legal entity’ on the PSC register.
It’s very important to understand that a company’s PSC register must never be empty. Companies which are taking reasonable steps to identify any PSCs must reflect that in their register, and companies that are confident they have no PSCs must also explicitly say so in their register. The information must always be kept up to date, and all changes in a company’s PSCs must be recorded. Failure to comply is a criminal offence.
There are statements set out in the law that companies must use in these circumstances, and more help can be found in the guidance which we have created.
From 30 June 2016, companies will need to start filing their PSC information at Companies House, and in most cases, it will be delivered via the aforementioned new confirmation statement. As well as keeping their own PSC register up to date, companies must ensure their annual updates to Companies House include all historic and current information on their PSCs. It will be 12 months before a full public register is available.
People seeking to incorporate new companies from 30 June 2016 will have to provide PSC information on their application for incorporation. They’ll be able to apply to incorporate electronically, as we continue our march toward becoming a completely digital organisation.
Public and protected information
Companies must provide all PSC information to Companies House, but some details, like the PSC’s residential address and day of birth, will be withheld from the public register. However, all other PSC information will be available in a similar vein to how director information is currently shown.
In exceptional circumstances where PSCs are at serious risk of violence or intimidation, applications can be made to have all PSC information withheld from the public domain. However, companies still need to send all their PSC information, which will be made available to law enforcement agencies. Full guidance about how to protect PSC information is available here.
Taken together, these reforms have been designed to bolster corporate transparency and confidence in business. By streamlining compliance processes, economic growth and prosperity in the UK, as well as the overall health of our economy, will be the result.
Meryl Jones is Head of Business Change at Companies House.