The Department for Business, Innovation and Skills has issued two Government responses on proposed changes to company law. There is an emphasis, under the Companies Act 2006, on light touch regulatory requirements for small and medium sized companies. Following a consultation launched in October 2013, the Government has announced details of some of its main proposals as follows:
- Annual returns: There will be a more flexible system than the current requirement for each company to file an annual return. Companies will have the option to check, notify any changes and confirm certain information at least once in a 12 month period. So, when updating one piece of information such as a director’s details, a company could use this as an opportunity to confirm the accuracy of all other information on the register.
- Registers maintained by a company: Private companies currently have to maintain their own registers as well as keeping the information on the public register up to date. In future, such companies will have the option of not keeping any or all of the following registers: directors; directors’ residential addresses; secretaries; members; and a proposed new register of beneficial ownership.
- Statements of capital: The Government considers that it is more useful for someone inspecting the public register to know the aggregate unpaid amount on shares, since this shows the capital the company can call up. Therefore the requirement to list the amount paid and unpaid on each share will be replaced with a requirement to state the aggregate amount unpaid.
- Subsidiaries: These should be listed in one place at one time, and formal proposals will be brought forward as part of the EU Accounting Directive.
- Registered office: a change to the legislation is proposed to require all companies to have a demonstrable link to their registered office address. This is to avoid the potential for fraudulent use of an address which has no connection to the company.
In addition, the Government has announced proposals to foster transparency of company ownership. In particular:
- Beneficial ownership information: a new registry of company beneficial ownership information will be created, with holdings of more than 25% (as applied in the anti-money laundering context) potentially needing to be disclosed.
- Bearer shares: these will be prohibited, although there will be further consultation on the process and timing, and there will be a set period of time for existing bearer share holders to surrender their shares for registered shares.