A series of changes that will affect all companies are coming into force as a result of the Small Business, Enterprise and Employment Act 2015. The new legislation intends to increase transparency in ownership and control of UK companies and, at the same time, to simplify a company’s filing requirements.
The new measures are being implemented in stages, which started in May 2015 and ending early 2017. Following the abolition of the so-called ‘bearer shares’ in May, three further important changes took effect on 10th October 2015.
The first change enabled Companies House to remove the day element of the company directors’ date of birth from the information available to the public. This is an effort to reduce fraud as a date of birth is frequently used in identity theft. However, where the director’s date of birth was contained in documents filed before 10th October the full date of birth will still be publicly available. In addition, companies still have a duty to send full details of their directors’ dates of births to the Registrar to avoid difficulties in identifying individual directors.
A second significant change relates to an individual’s consent to act as a director or secretary of a company. Previously, a director being appointed was required to sign the appropriate form confirming his consent. From 10th October, the new director no longer has to sign the form and, instead, the company is obliged to confirm that the new director has consented to act. Companies House will also notify the newly appointed director and provide him with information about his role and duties. This will give the new director an opportunity to apply for the appointment to be removed from the register in the case that he did not agree to act as a director. The intention is to address a number of disputes in courts where individuals claim not to have consented to act as directors. This new procedure will enable Companies House to deal with such cases administratively, avoiding more disputes going to the courts.
Lastly, a third change introduced accelerates the time it takes to strike a company off from the public register. In the midst of keeping a balance between removing companies that are no longer carrying on business and allowing time for creditors to come forward, the new Act reduces from three to two months the timescale Companies House has to strike off a company after a notice has been published in the Gazette. As a result, the overall period it takes to strike a company off will be reduced from approximately six to four months.
The next phase of changes are due to be implemented in December 2015 and it is worth ensuring businesses are up to speed with the new rules.