The Small Business, Enterprise and Employment Act (SBEE) received Royal Assent in March 2015. Almost two years on and the vast majority of the SBEE has now been phased in gradually, which has had numerous implications for companies.
In this update we will break down the main corporate aspects of the SBEE and the current status of their implementation.
Register of people with significant control
The most significant change introduced by the SBEE has been the requirement for companies, from 6 April 2016, to keep a register of people with significant control (PSC) over them.
Almost all companies must now have established a PSC register which must be filed at Companies House and updated when a change to a PSC occurs.
A person or company will be deemed to be a PSC if it fulfils any of the following:
- Holds more than 25% of the shares or voting rights in the company;
- Holds the right to appoint or remove a majority of the board of directors of the company;
- Has the right to exercise significant influence or control over the company; or
- Has the right to exercise significant influence or control over a trust or firm:
a) which is not a legal person; and
b) whose trustees or members meet any of conditions (1) to (3).
On 30 June 2016, the annual return that companies have long been required to file on an annual basis was abolished. This was replaced with the confirmation statement.
This is simply a statement that companies must file with Companies House confirming that the information held for them is up to date.
This is advantageous for those filing information at Companies House as you are simply required to check and confirm whether there have been any changes to the information and notify Companies House if there have been any changes.
Companies must file a confirmation statement within one year after their previous confirmation statement or annual return. A filing date can therefore be changed by filing the confirmation statement prior to the anniversary of its last filing.
Companies House has recently clarified that companies which have not previously filed a new style statement of capital (introduced from 30 June 2016), need to file a full statement of capital with their confirmation statement, which now must include the aggregate amount unpaid on the total capital of the company.
The SBEE also requires all directors to be natural persons and prohibits the appointment of corporate directors. Although this change has not yet been implemented, the plan to introduce it has not been abandoned.
Once the prohibition is introduced, the intention is that any remaining corporate directors after one year will automatically cease to be directors. Companies should prepare for this by reviewing their directorships and ensuring individuals are in place as directors to undertake day to day decisions of the business.
The Department for Business, Innovation & Skills stated its intention to introduce the ban in 2016. However with no further statement given, it is unclear when we can expect the prohibition to commence.
Berry Smith is able to advise on and assist with any corporate governance issues and can also offer company secretarial or registered office services for your business. Should you wish to discuss these or any corporate issues, please call us or email email@example.com for further information as to how we can assist you.