Company Law changes

A number of important changes that could affect your company and its filing requirements have been enacted by parliament over the last few months. While the laws are now in place, their practical introduction is being phased in slowly. Each of these changes has technical requirements and wider implications associated with them, so please do contact us directly to discuss them before you make any changes.

The following is a guide to help you understand the changes.

Bearer Shares

A bearer share is a stock certificate that belongs to the person who happens to have it at the time. This means that unlike registered shares, a bearer shareholder’s details are not entered in the company’s register of members. As of May 2015, bearer shares have now been abolished and companies are now prohibited from creating new bearer shares. Those shareholders who currently have bearer shares must now surrender them back to the company for conversion into registered shares.

If you have issued bearer shares, please speak with us about the notification requirements and filing of new articles at Companies House.

Register of People with Significant Control (PSC)

PSC is the new term for those people previously known as beneficial owners.  Companies are now required to identify any person with significant control in their business and keep information about them in a register for public inspection, to be held at Companies House. Though the definition of such a person is currently open for consultation, the most recent suggestion is for individuals who

  • hold 25% of shares or voting rights, or
  • have the ability to control the board of directors

Information requirements will be the same as it is currently for directors. PSC information will be provided to Companies House on incorporation and then every year on the Check & Confirm service. This must include any changes that have occurred during the year or a statement that there is no PSC or the PSC is unknown. Companies are required to start maintaining a register for PSC’s from April 2016 in readiness for submission as of June 2016.

Check & Confirm (C&C)

The current requirement to complete an annual return to Companies House will be replaced with a requirement to ‘check, notify changes if necessary, and confirm’ information at least once a year. If a company chooses to check and confirm (C&C) before the 12 months are up, there will be no requirement to do so again for another 12 months. At the same time, those companies wishing to continue to use a fixed date will still be able to do so. Companies will still be required to pay an annual fee.

The new system will also simplify a private company’s obligations with respect to details of legal shareholders – as they will no longer be required to resubmit shareholder names where there has been no change.

Any annual return that would have been filed after 30 June 2016 will be replaced with this requirement.

Date of Birth Suppression

In an effort to make it more difficult for criminals to obtain a director’s full date of birth, as of 10th October 2015 Companies House will not display the day of a director or PSC’s birthday. Only the month and year will be publicly available.

However, Companies House will continue to collect the full date of birth for directors and Persons of Significant Control when they are appointed or when notified.

This change is applicable only for new directors or PSC’s as here will be no historical suppression of the date of birth.

Faster Strike Off

From 10th October 2015, a faster strike off procedure for all companies will be in force, while still allowing creditors sufficient time to object.

The time it takes for Companies House to strike a company off the public register will be reduced from

  • 3 to 4 months for a voluntary strike off to approximately 2 months
  • 5-6 months for a compulsory strike off approximately 3.5 months.

It is therefore very important for companies to file their accounts and annual returns on time.

Director Disputes on Appointment

Currently, any company appointing a new director must submit ‘consent to act’ information to Companies House. As of 10th October 2015, this is to be replaced by a statement of truth that a director consented to act in the relevant capacity. It will therefore no longer be necessary for a company to obtain the signature of consent, but it is up to that company to establish that consent was given. It is intended that this will make it easier for directors who say that have been falsely appointed, to get their details off the register. In the event of a dispute a company will be required to provide evidence, sufficient to satisfy the Companies House that a director consented to act.  If they cannot provide that evidence, the appointment will be removed.

Registered Office Disputes

If your office or home is used without permission as the Registered Office of a company you do not know, it will become much easier to make a complaint and have your address removed as Registered Office. The new approach, coming into effect from December 2015, will enable Companies House to change a company’s registered office when they consider that the company is not authorised to use that address. Upon receiving a complaint the company will be required to provide evidence that they are authorised to use the address in question.

Company Registers

Previously, all company registers were required to be held at your registered offices. June 2016 will see the introduction of a policy to allow private companies to elect to keep any or all of the following registers on the public record at Companies House:

  • Register of members
  • Register of directors
  • Register of directors’ residential addresses
  • Register of secretaries; and
  • (the new) Register of people with significant control (PSC).

It should be noted however, that any information held in this way will be publicly available. Third parties will be able to obtain information by searching the public register online rather than having to contact companies directly to obtain the information they require. Moreover, depending on which registers a company elects to be held at Companies House, information relating to their members (e.g. their addresses) and/or full date of birth of their directors or PSCs will be available on the public record.

The company must ensure that the information on the public register is up to date in the same way that it would be required to update its own registers.

It has been suggested that many companies will not choose to keep this information on public file and we are happy to continue to maintain these registers for customers.

Please do consult with us before deciding to hold any of your information in this manner.

Corporate Directors

As of October 2016, the majority of UK companies will no longer be permitted to appoint a company or a foreign corporation as a director.  Corporate directors are considered useful in some parts of the UK economy and there will be exemptions to the ban on corporate directors in limited circumstances.

Companies will have to explain before the deadline of a reason for retaining a corporate director.

Additional Information

Companies will be able to make specified types of ‘additional information’ available on the public register. Initially, the intention is to allow companies to update the register with their trading address and/or number of employees, at any time. Also under consultation is the use of email and website addresses which may be included and updated at any time.

This information that can be provided will be determined a statutory basis, however it will be completely voluntary to add this information, and the responsibility to keep it up-to-date will be with the company. Any redundant information will be removed. This will come into effect from late 2016/early 2017.

If you have any general or specific questions about how this could affect you, please contact Ian Saunders on 020 7616 8852 or email him on ian.saunders@wildercoe.co.uk

Ian Saunders
Partner at Wilder Coe
Ian is expertly positioned to advise clients on all matters pertaining to Company Secretarial services and Company Formation. His ability to communicate the types of structure that are available to you, coupled with his professional understanding of which structure would benefit your business best makes his support a highly sought after commodity.