Changes in company filing requirements

Some notable changes are being introduced by the Small Business, Enterprise and Employment Act 2015. Some of those aim to enhance corporate transparency. The Act also makes various changes to company filing requirements that shareholders and directors should take into account.

Company registers

• Private companies will have the option (with shareholder approval) to keep certain elements of the company books on the central public register at Companies House, instead of maintaining their own separate registers.
• A company will be able to opt in to keep all, or any, of the following registers with Companies House: registers of members, directors, secretaries, directors’ residential addresses and/or the in-coming “persons with significant control” register (on which we reported here).  A company will still be required to ensure that the information on the public register is up-to-date in the same way that it is required to update its own registers.
• Although it may seem attractive to minimise the time spent administering company books, directors and shareholders should carefully consider whether the option suits the company’s operations.  A company that opts to have registers kept at Companies House will have certain additional information made available to the public that would not be made public if kept on its own register (for example, the addresses of members and directors’ full dates of birth).
• There is a potential time delay in updating the register of members at Companies House, which may not be desirable in circumstances where an individual needs to be shown as a legal owner of shares at a particular date.

These provisions are expected to come into force in June 2016.

Appointment of directors

Date of birth

• Although a director’s full date of birth still needs to be filed with Companies House, there is no longer a requirement to include the actual day of birth on a company’s public register of directors.  This change is aimed at helping to protect directors from becoming victims of fraud or identity theft.  The full date of birth will only be disclosed in exceptional circumstances (for example, to credit reference agencies or public authorities).
• If, however, a company elects to keep its register of directors at Companies House, the full date of birth will be available on the public record.

Consent to act

• A company appointing a director must now confirm on the relevant filing that the appointee has consented to act.  There is no longer a requirement for an appointed director to indicate consent by signing the relevant form: the company’s confirmation is now treated as sufficient.
• On receiving notice of the appointment, Companies House will write to the new appointee to inform them that their appointment has been filed on the public register, and to provide details of their duties as a director.
• So a company can no longer rely on a signature on the notice of appointment as evidence of a director’s consent to act.  It is recommended that a separate consent is given by the director and retained by the company in case the Registrar requires proof of consent.

These provisions came into force on 10 October 2015.

Annual returns to be abolished and statement of capital to be simplified

• The requirement to file an annual return will be abolished and replaced with a “check and confirm” process.  The confirmation statement, like the annual return, will need to be submitted every 12 months.  It will only detail company changes that have occurred since the last confirmation statement.
• The statement of capital will be simplified by removing the requirement to show the amount paid up and unpaid on each share.  This will be replaced with the aggregate amount unpaid on the total number of shares.  It is thought this figure will be more useful for shareholders and creditors by showing funds that are still due to a company.

These provisions are expected to come into force in June 2016.

Comment

Some of the changes are designed to protect certain information and to simplify filing requirements.  But given the public nature of online company registers and the potential delay in updating the registers, companies should carefully consider whether the online register regime is appropriate for their operations.

­If you would like any advice or further information, please contact Giao Pacey.