The Department of Business Innovation & Skills (BIS) has recently published responses to two different papers which contain proposals that will impact on the way in which companies operate. Below we review the responses and highlight key proposals.
1. Response to discussion paper “Transparency & Trust: Enhancing the transparency of UK company ownership and increasing trust in UK business”
Following the G8 Summit last year the government published an action plan to prevent the misuse of companies and legal arrangements. BIS subsequently published a discussion paper seeking views on how best to improve corporate transparency and accountability in the UK, and it has now published its response to that consultation.
- A central registry of company beneficial ownership information will be created. This registry will be operated by Companies House and will be publicly accessible
- UK bodies corporate will be required to obtain beneficial ownership information, provide that information to the central registry and maintain a register of beneficial owners
- The creation of new bearer shares will be banned. Existing holders of bearer shares will have a set period of time to surrender them after which any remaining bearer shares will be cancelled
- Corporate directors will be banned in most cases. There will be some limited exemptions.
- Information on directors' duties is to be improved to increase awareness. BIS will also consider if those who control directors should be subject to directors' general statutory duties
- The directors' disqualification regime will be amended to enable the courts to take account of directors’ overseas misconduct, and empower them to order directors to compensate creditors who have suffered identifiable losses from their misconduct.
2. Response to consultation on simplifying filing requirements
Linked to the above reforms, BIS has published a response to its consultation on simplifying company statutory filing requirements.
- The requirement to complete an annual return will be changed to a requirement to 'check, notify changes if necessary and confirm' statutory information at least once in a 12 month period. There will still be an annual fee
- Private companies will have the option of not keeping any or all of the following registers: register of members; register of directors; register directors' residential addresses; register of secretaries; and the proposed register of beneficial ownership. Where a company exercises this option, it must ensure that the information on the public register is up-to-date.
- Although it will be necessary to supply a director's full date of birth, the public register will just show the month and year of birth. However, where private companies elect not to maintain a register of directors, the full date of birth will be included on the public register
- The requirement for statements of capital to list the amount unpaid and paid up on each share is to be replaced with a requirement to only state the aggregate amount unpaid
- Details of a company’s subsidiaries should be included in its accounts
- Companies House will widen its use of electronic communications and will have the facility to be able to send all correspondence and statutory notices electronically
- The Registrar of Companies will have power to change a company's registered office when it considers that the company is not authorised to use that address
- The time it takes to strike off and dissolve a company will be reduced.
The government intends to amend the necessary legislation (including the Companies Act 2006) to implement all these proposals when Parliamentary time allows.This information is intended as a general discussion surrounding the topics covered and is for guidance purposes only. It does not constitute legal advice and should not be regarded as a substitute for taking legal advice. DWF is not responsible for any activity undertaken based on this information.