Company Secretarial Update

David McBain

David McBain

Partner & Head of Audit

26 April 2016

The Small Business, Enterprise and Employment Act 2015 has introduced a number of changes to company law in the past year, including, amongst other areas, the acceleration of the company strike-off process, introduction of the requirement to consent to act as an officer of a company, and the protection of a director’s day of birth on the public record.

This month a number of other changes were introduced, the most notable being the requirement from the 6th April for all UK non-listed companies (including Limited Liability Partnerships) to maintain a register of every person with significant control or influence over them (PSCs). A company has an obligation to take reasonable steps to identify all PSCs and confirm the information.

The register will be available on reasonable request for public inspection and also searchable online from the 30th June 2016 when this information must be filed at Companies House along with the annual confirmation statement (which is due to replace the annual return). A register can never be blank; even if no PSCs exist, or confirmation has not been received, a register is still required stating this fact. 

Who has significant control – an individual is classed as exercising significant control it if satisfies one or more of the following categories:

  1. Directly or indirectly holds more than 25% of the shares in the company; 
  2. Directly or indirectly controls more than 25% of the voting rights in the company;
  3. Has the power (directly or indirectly) to appoint or remove a majority of the board of directors of the company;
  4. Has the right to or otherwise exercises signification influence or control over the company; or
  5. Has the right to exercise or actually exercises significant influence over a trust or firm which in turn falls within any of the above categories in relation to the company.

Failure to comply with these requirements (including the obligation to take reasonable steps) will be a criminal offence and may result in a fine and/or imprisonment for up to two years.

Other changes this month include the simplification of measures to get falsely appointed directors’ details removed from the public register and new measures to assist with registered office address disputes.

The next phase of changes will be implemented in June with the replacement of the annual return system with an annual ‘confirmation statement’ and at the same time simplification of the statement of capital information. Private companies will also be able to opt to keep certain information on the public register instead of holding their own statutory registers. However if this option is taken, certain protected information such as shareholder’s/director’s addresses or day of birth also becomes part of the public record.

Later in the year (proposed implementation date of October) the ability to appoint corporate directors will be removed, with limited exceptions. Any company with an existing corporate director will need to take action over a transition period expected to be 12 months from the implementation date.

Ensuring compliance in company secretarial matters can be administratively time consuming for a business, particularly with all of the recent and upcoming changes.

We have a dedicated team who can offer all aspects of company secretarial work tailored to your specific requirements.