This year marks the implementation of some of the key provisions of the Small Business, Enterprise and Employment Act 2015 which passed last year. The Act introduces a number of measures aimed at reducing red tape and improving transparency in the ownership of UK companies. Some of the key corporate changes are as follows:
From April 2016 companies (other than those whose shares are publically traded) will be required to keep a register of people with significant control over the company (PSC register). Whilst further guidance is awaited, a person will be deemed to have significant control where the individual (either alone or jointly):
holds more than 25% of the shares or voting rights in the company; or
has the ability to appoint or remove a majority of the board of directors; or
exercises, or has the ability to exercise, significant influence or control over the company, or a trust or firm that itself has significant control over the company.
Whilst the new measures would seem to assist in increasing transparency they will no doubt, in the short term, place some additional burdens on companies. It is worth noting that the sanctions for failing to comply with the new rules can have serious consequences, particularly in the case of a failure to maintain a PSC register, for which there can be criminal liability on the part of the Company, its directors or its shareholders.
If you would like to discuss the Small Business, Enterprise and Employment Act 2015, or if you require our input in ensuring that you are compliant with the new provisions, please do not hesitate to contact us.