The Small Business, Enterprise and Employment Act

How will the new changes affect your business and your clients’ business?

On the 26th March 2015 Royal Accent was given to the Small Business, Enterprise and Employment Act (“The Act”). Over a third of this Act contains changes to Company Law and the way limited companies should be administered with the main purpose of the Act being a way to reduce red tape and to increase transparency and trust in UK companies.

We have detailed below some of the main changes and the likely dates of implementation.

MAY 2015

Bearer Shares
Companies will no longer be able to issue Bearer Shares and those companies that do have Bearer Shares will have 9 months to convert these into Share Capital.

OCTOBER 2015

Corporate Directors
No corporate body may be appointed as a Director of a UK company. This means that any UK company which has a corporate director must resign the position within a given timescale. The only exceptions would be Group structures with large listed companies or large private companies and charities.

Registered Offices
The Registrar of Companies will have the authority to change the registered office address of a company if a complaint is made that the company is using an address it is not authorised to use. The company will be contacted to provide evidence of the use of address and if no evidence is forthcoming the address may be changed to a director’s home address or an address that the Registrar decides. This will obviously be difficult where the director lives outside the UK.

Appointment of Director procedure
It is envisaged that the existing arrangements for appointing a Director online either on an existing company or on formation of a new company will change.

The three from seven personal information data will be replaced by a Statement of Truth to confirm that the Director or Secretary has consented to their appointment. On receipt of the appointment Companies House will write to the individual Directors notifying them of their appointment as a Director and their legal duties. If the newly appointed Director does not wish to be appointed they may be able to contact Companies House to request removal of their appointment.

The Company may also be requested to show evidence of the consent to act by that individual. We would suggest that every appointment be approved in a meeting where the minutes should contain a “consent to act” clause which would require signature by the appointee. We are not sure whether the 3 out of 7 personal criteria will be abolished for shareholders on formation, but will advise in due course.

Accelerated Strike off
The timescale on companies being struck off by Companies House will decrease. Voluntary strike off will be reduced from 3-4 month to 2 months and compulsory strike off through late filing and inactivity will be reduced from 5-6 month to 3 ½ months.

Directors Date of Birth
The day of birth will not be shown on the Companies House public register so whilst you must still give the full date of birth ie 11.06.1958 only 06.58 will be shown.

JANUARY 2016

New Company Register- Register of People with Significant Control
In January it will be necessary to hold a new Company Register. This Register will be open to inspection by the public and will contain information on any person who has a 25% or more interest in a UK company or who has control, directly or indirectly, to exercise over 25% of the votes. This is regardless of whether the company shareholding is held by a nominee shareholder and in these cases it is the beneficial owner’s name that has to be disclosed in the register.

Please Note that this register does not have to be disclosed at Companies House, so all nominee arrangements will only be open to anyone who physically wants to inspect the Register at the address where the Register is held. The Register will be similar to the register of Directors and will contain the name, date of birth, service address and the date on which the beneficial interest was acquired and how it is held.

We would assume therefore that a separate private register of Residential addresses of Persons with significant control may also be required. It is the Company and its officer’s task to show reasonable efforts to find out the information on beneficial owners and a legal obligation of the beneficial owners to disclose such information.

Penalties for non-disclosure could involve hefty fines and imprisonment. A subsidiary may only disclose its holding company, but the holding company must disclose all shareholders with significant control.

APRIL 2016
Statement of Capital
The requirement for a Statement of Capital on formation and on any changes to a company such as allotment and sub-division will remain, however, instead of the requirement to detail paid up capital it will be necessary to detail the aggregate amount of capital unpaid on each share only.

Annual Return
The annual return will be abolished. In its place will be a confirmation to Companies House at least once a year or when making a change of officers or share capital that the data filed at Companies House is up to date. Provided that there have been no changes, shareholder information may not be required to be submitted. There will still be an annual fee but it has not been decided how this fee will be paid, it may even change to an accounts filing fee.

Company Registers
Private Companies will have an option of keeping Company Registers at Companies House. This is completely optional and the registers to be kept would be the Register of Directors’, Register of Directors’ Residential addresses (this one is not available to the public), Register of Secretaries. The Register of Members and the new Register of People with Significant Control may also be kept upon the approval of ALL Members. Companies may opt to file other information on the public register such as website addresses and general information but this has not been fully formalised.

Other small changes may include the following:-
It will be optional for email addresses to be used by Companies House for routine correspondence and statutory notices. With their existing spam issues we are not sure this would be a good idea, however, it would not be compulsory

Subsidiary Companies should be listed in one place and it is believed that the best place would be in the Accounts of the company

Private companies will be able to file accounts simultaneously with Companies House and HMRC.

We hope you have found this information useful and if you have any questions please feel free to email me on steve@fcls.co.uk

CCH- FIRST CORPORATE PARTNERSHIP ANNOUNCEMENT

First Corporate are pleased to announce that they have entered into a partnership arrangement with CCH- Wolters Kluwer one of the UK’s leading providers of Accountancy Software
We will be offering company formation, secretarial and legal services support to CCH and their client base in conjunction with their new company secretarial software released this week
In return we will be able to promote the range of accounting and tax products provided by CCH
Clients interested in adding CCH accountancy software to their company formation and company secretarial needs then please contact us for further information

Nominee Director Services

First Corporate are pleased to announce a new nominee director service with a named individual based in Cyprus
For commercial reasons some owner clients of UK and offshore companies may wish to remain confidential and appoint a nominee to act for them.
Our nominee; appointee director and trustee shareholder, services (named individual) are not only used to help ensure the highest degree of privacy and confidentiality for the client by keeping client information out of public record at the company registrar but as we have a natural person, rather than just a nominee company, the client company is perceived to be more correct.
Subject to our usual KYC – due diligence requirements we can arrange for a nominee director, British passport holder and permanent resident in Cyprus, to act for them.
Know your client (KYC)
We will require the following.
A certified copy passport of the client (Ultimate Beneficial Owner – “UBO”) our officer is acting for.
A certified copy of two utility bills confirming that person’s usual residential address.
(Certified means they have to be produced in front of a solicitor who certifies on each document that they are correct)

In addition we need full details of:
The company’s activities, shareholders and any other officers.
Our standard “Terms, Conditions and Declaration by Ultimate Beneficial Owner(S) or Agent” of the company our officer is acting for.

Service Provided
The “director” will provide all necessary documents to ensure safeguards are taken in order that, as the appointed director, we will only act on instructions of the client or their authorised agent. Therefore, the ultimate beneficial owner (UBO) retains control over the important actions taken in their company.
The nominee will require to be informed on all matters including contracts, leases and movement of funds over the amount of GBP5000 in and out of the company’s bank account. This can be by simple email of board resolutions to be signed and returned for statutory compliance.
As “trustee shareholder” the client/UBO is provided with documentary evidence (“trust deed”) ensuring the ownership of their company resides with them. The shareholder will hold shares in trust for their benefit and deal with or dispose of the shares as the client/UBO or their agent may instruct.
Fees
£750 plus vat per annum. Any matters dealt with by the appointed officer upon request of the client will be charged and should be agreed in advance. A copy of our standard fees will be provided upon request.

The Small Business and Enterprise Bill

This new bill which is currently going through the House of Lords and is expected to be introduced and passed in the summer has many changes which will affect every UK Registered company:-

The main changes include the following:-

A new style annual return which will become a simple annual confirmation that the information filed at Companies House is correct, there will be no set date for the filing so long as the return is filed once in every 12 months. The need to supply a list of members every 3 years will be abolished, but transfers and changes will need to be recorded

Corporate Directors will be no longer be allowed except for certain exceptions which will include the amendment of existing corporate directors, this is mainly because the new Bill aims for Companies to be more transparent. Another aspect of this is that companies must disclose to Companies House any person who holds over 25% of the share capital, a person deemed to have significant control even if this person is hidden under a nominee shareholders situation. The information must be kept in a new register held by the Company which will be open to inspection and also filed at Companies House. Disclosure must also be made on new company formations.

Company Registers may be held on the public record rather than held by a company internally, this is an optional item to ensure the information filed at Companies House is always up to date.

Bearer shares are to be prohibited and existing bearer share holders will have a period with which to change from bearer shares to registered shares.

More information will follow when the Bill has been passed and we will endeavour to make you aware of these changes and the dates they will come into force

Company Restoration Court fees increase

The fee for a restoration of a company through the court process has increased from August 2014. The courts have increased their fee from £169 to £280 therefor increasing the total fee for a restoration to £1300 inc vat and disbursements. For further information on Company Restorations contact Graham@fcls.co.uk

NEW FCLS WEBSITE

FIrst Corporate are pleased to launch our new look website. The website has been designed to keep our accountancy and solicitor clients up to date with regular blogs on changes in Company Law and useful tips and advice. You can access our Company Secretarial Software and Company Formation software via the website and find information on all our services. We hope you like the new site.

Share Restructuring

We receive many enquiries regarding share restructuring- the procedure is fairly straightforward and all we would need to proceed is the name and number of the Company along with a snapshot of the existing shareholders and a final picture of what you require along with the rights of the shares. We will provide all resolutions, minutes and notices, new updated articles of association and any company house forms. Everything is completed so your client just needs to sign and date. Email steve@fcls.co.uk for more information