New Laws Designed to Make Ownership and Control of Companies More Transparent
Changes are being made over the next 12 months aimed at increasing transparency in the ownership and control of companies.
The changes, contained in the Small Business, Enterprise and Employment Act 2015, will:
- require companies to maintain a register of people with significant control over the company, the PSC register; and
- impose a ban on corporate directors.
From January 2016, companies (other than publicly traded companies) will have to maintain a PSC Register. The register will have to be made publicly accessible, although there will be some exceptions. From April 2016, companies will also have to provide details of individuals with significant control to Companies House on an annual basis. Private companies will have the option to hold their PSC Register solely at Companies House.
A person with significant control is an individual who, either alone or with others:
- Owns more than 25% of the company’s shares;
Ban on corporate directors
From October 2015 companies will no longer be able to appoint new corporate directors. All directors will have to be natural persons. Companies who already have corporate directors will have until October 2016 to remove them. However, there is a power in the Act to provide for exceptions and the Government is consulting on the extent to which exceptions should be put in place.
None of these changes currently apply to limited liability partnerships. This means that LLPs will still be able to have corporate members. Although the government intended that LLPs would be covered by the obligation to provide PSC information, the Act does not extend the PSC regime to LLPs.
If you would like further information on any of these developments, please contact Peter Doyle.
The articles published on this website, current at the date of publication, are for reference purposes only. They do not constitute legal advice and should not be relied upon as such. Specific legal advice about your own circumstances should always be sought separately before taking any action.