The Small Business, Enterprise & Employment Bill was introduced to Parliament in June 2014 and received Royal Assent on 26 March 2015.
The Act has the intention of fostering and encouraging entrepreneurial spirit in the UK, and will impact upon a number of company and employment law matters. Smaller, privately owned companies are likely to experience the greatest impact, in particular when it comes to company transparency and accountability, as such measures have traditionally only been aimed at large publicly listed organisations.
The Act represents one of the most far reaching changes to business processes and the administration of private companies since the Companies Act 2006.
The parts of the Act concerning corporate transparency, company filings and amendments to the directors’ disqualification regime will start to become law in a staged process during the next year. The purpose of this post is to set down key dates that are likely to be of importance to small to medium sized private businesses.
The Act: Key Dates for Your Diary
By May 2015: Companies will no longer be able to issue ‘bearer shares’. These are unregistered shares owned by whoever has physical possession of them. Any that already have them will have a nine month period of grace to convert them to registered shares.
October 2015: ‘Corporate directors’ will be abolished. These are one company acting as a director of another. From October, all directors will have to be ‘real’ people. There will be exceptions to the rule, but these are not likely to affect smaller businesses. Measures aimed at helping to resolve director and registered office disputes will also be introduced.
January 2016: It will become necessary for companies to start keeping a register of people who have significant control. This will be known as a PSC register and the information will need to be filed with Companies House as of April 2016. The Government is still in the process of seeking a higher level of clarity on how PSC registers will work in practice, but the changes will still affect all companies within the next year.
April 2016: Annual returns will be replaced with a simpler confirmation statement and changes concerning the statement of capital income will come into force. Also at this time, companies will be able to opt out of keeping certain statutory registers, instead taking up the option of keeping information on public registers.
Reducing Red Tape
One of the key aims of the Small Business, Enterprise & Employment Act was to make it easier to set up and administer a company: in other words, to reduce red tape. Systems will be put in place to ensure companies can fulfil all the legal obligations digitally, and there will be more flexibility when it comes to confirming the accuracy and completeness of company information at any given point during the year.
Whilst they will take some getting used to, we believe the changes brought in by the Act will benefit smaller companies in the long run. If you are in any doubt as to how the changes brought in by the Act will affect your business, your bookkeepers will be able to help.