The Small Business, Enterprise and Employment Act 2015 (SBEE) received Royal Assent earlier this year and is set to herald significant changes to UK company law.
Scheduled to be implemented by October 2016, proponents hope the legislation will considerably improve the position of SMEs by reducing red tape and ensuring fair competition.
Ultimately, the Act could play a crucial role in influencing investors considering doing business in the UK.
Central to the legislation, there are a number of changes relating to what companies file with Companies House. It is expected that all companies will be affected by at least some of the changes.
What are the key changes and what do you need to do now?
While there are a number of key changes being brought in with the Act, companies should pay particular attention to the following points that require early action.
|Change||What to do now|
|Abolition of bearer shares.||Shareholders with existing bearer shares should apply to the Company to surrender these for conversion into non-bearer shares as soon as possible. Any shares not converted by December 25th 2015 will have the rights attached to them suspended and will no longer be transferable. The right to surrender comes to and end on 25th February 2016 following which the company must apply to court (see below).
There are obligations on companies with bearer shares to give notice to their bearer shareholders of their rights of surrender and the consequences of failing to voluntarily surrender them. Should a company still have bearer shares in existence by February 26th 2016, they will be required to apply to the court within a period of three months to cancel them. Failure by a business to follow the prescribed procedure for dealing with bearer shares is an offence.
|Introduction of a new PSC (Persons of Significant Control) register.||Start considering the processes that will need to be implemented to ensure you can identify your PSCs from January 2016 to avoid committing a criminal offence. A PSC is any person who satisfies one or more of the following conditions:
Keep an eye out for further guidance on this, set to be published this Autumn.
|Companies required to publish information showing any differences in male and female pay. Expected to apply to all businesses with 250 or more employees.||The government has published an initial consultation paper on the proposals to require companies to publish pay information in a bid to identify and remove the pay gap between male and female employees.If you would like to view the consultation document, you can do so here (ended September 6th).
In addition, employers who have never analysed their gender pay gap or conducted an equal pay audit should consider doing so now to identify and, if possible, remedy any discrepancies before publication.
|Large companies may be required to publish details of their b2b payment practices.||Companies not defined as ‘small’ or ‘medium’ under the Companies Act 2006 should consider the procedures that will need to be implemented to establish the following:
|Abolition of corporate directors. The new legislation will require all directors to be natural persons (an individual rather than a company), subject to possible exceptions still TBC.||Companies should begin to compile a list of corporate directors and give some thought as to which individuals may be appropriate replacements.|
If you would like to know more about how the new legislation impacts your business, please contact Linder Myers today.