Small Business, Enterprise and Employment Act 2015

The UK's Small Business, Enterprise and Employment Act 2015 received Royal Assent on 26 March 2015, and makes important changes to the law applying to UK companies.

On 06 April 2016 the implementation of part of this act came into force in relation to the new Persons with Significant Control (PSC) Register. Most UK companies and LLPs from this date will now need to keep a new statutory public register which records the people who control your company. There will be criminal penalties for the company, its directors and secretary, and PSCs, if they do not comply with the new rules.

For most companies these will be individuals who:

• Hold more than 25% of the company's shares
• Hold more than 25% of the company's voting rights
• Have the right to appoint or remove the majority of directors

You will also need to keep a record of any person who has the right to, or actually exercises significant influence or control over the company or any person who has the right to, or actually exercises significant influence or control over a trust or company that meets the above conditions.

From 30 June 2016 you will need to provide Companies House with details of these people - your PSC's. From this date, the annual return is being replaced with the confirmation statement and like the annual return, you will need to at least once a year review the information Companies House are holding about your Company. The rationale behind this is to offer more flexibility for companies - there will be no need to provide any additional information to companies house if at the time the statement is made, all filings are up to date.

Completing your confirmation statement will require you to check the information Companies House holds for you in connection with your registered office, directors and location of registers, update your shareholder information, statement of capital and SIC codes, and check and confirm your PSC record is up to date. Your first confirmation statement will require you to provide Companies House with the information contained in your PSC register.

At the moment, updating your PSC register is an annual requirement but from 2017 the government may increase the frequency for Companies House filings, to bring the new rules in line with the EU Fourth Money Laundering Directive.

There are also a number of other proposed changes:

• Private companies will be allowed to keep their registers of shareholders, directors, secretaries and PSCs at Companies House, instead of having to maintain their own separate registers, in order to cut down on administration.
• As part of restricting the use of corporate structures to hide illegal activity, companies and other corporate entities will be prevented from being appointed directors. The ban is expected to start from October 2016, and companies affected will then have a one-year transitional period to appoint replacement directors. However, the date for implementation for this has been delayed a number of times already so it is possible that it may be delayed further.

For more information on this story please contact Danielle Chetwynd in the Corporate Department or one of her colleagues.