The implications of the Small Business, Enterprise & Employment Act 2015. (Part 2)

Filing Requirements for businesses

The implementation of the Small Business, Enterprise & Employment Act 2015 has some major consequences for businesses. In this blog post, we are focusing on the need for companies to comply with record keeping requirements. This part of the Act replaces part 24 of the Companies Act 2006. All companies are required to file records and have policies in place for record keeping. Therefore, this change will have an effect on all businesses. The following sets out what is being changed or introduced.

Annual Returns

From June 2016, there will no longer be a requirement to file an annual return to Companies House. Instead, companies are to deliver a Confirmation Statement to Companies House every 12 months from the date of incorporation as opposed to sending information to the central register. The Confirmation Statement will include:

• details of a change of registered office;

• details of company registers relating to directors, company secretaries and people with a significant influence;

• any obligations that arise as a result of a decision by a company to keep any of its registers on the central register;

• details of where a company keeps company records if it uses a single alternative inspection location.

This new requirement changes the way in which companies file annual records. As opposed to an annual return, companies simply have to notify in the Confirmation Statement any changes to the company as stated above. The aim of this was to simplify notification requirements to Companies House. If nothing has changed then companies simply have to state this.

Person with Significant Control and/or Influence Register

From April 2016, there is a requirement for companies to have a register called the “Person with Significant Control Register”. This is aimed at identifying those individuals who have a significant influence or can control a company. From 30th June, there is a requirement to file those Person With Significant Control registers to Companies House. There are several options for persons to be deemed as having ‘significant influence’ or ‘significant control’:

• The individual holds, directly or indirectly, more than 25% of the shares or voting rights in the company.

• The individual holds the right, directly or indirectly, to appoint or remove a majority of the board of directors of the company.

• The individual has the right to exercise, or actually exercises, significant control and/or influence over the company. Draft statutory guidance on the meaning of ‘significant control & influence’ has been published which defines the meaning further.

• If the trustees of a trust or the member of a firm that is not a legal person meet any of the other specified conditions (in their capacity as such) or would do so if they were individuals, or actually exercises significant influence or control over the activities of that trust or firm then that individual is also identified as a person with significant control.

The consequences of this new requirement include having to supply the names and addresses of those considered to have significant control or influence on the company.

However, these details will not be made available to the public. Failure to comply with this new requirement may result in fines or imprisonment.

Central register at Companies House

New options have been introduced by the Small Business, Enterprise & Employment Act 2015.

Companies have the option to file its PSC register with Companies House. The main aim of this option is to allow companies to notify Companies House without it having to complete its own register of PSC. If companies decide to do this, a 14-day period of notice is required as there is an option for registered people to appeal their information being held at Companies House. Any personal data given to Companies House will forthwith be classed as public information. Other registers available to keep on the central register include:

• Registers of members.

• Registers of directors.

• Registers of directors’ residential addresses.

• Registers of secretaries.

To conclude, the new legislation indicates the significance of the importance of up-to-date record keeping. It is clear to see that it is beneficial for companies to be proactive in their approach to filing requirements and complying with new legislation.

How rradar can help:

For more information about our Corporate and Commercial team and how they can help your business please visit our website and speak to Emma and Louise today for free.

Follow us on Twitter and Linkedin.