Employment Act 2015 Update
Published: 26 October 2015
The Small Business, Enterprise and Employment Act 2015 is currently being implemented in a staged fashion throughout 2015 and 2026. During this transitional period it is important to be aware of the new measures coming into force so that you don’t get caught out, namely:
1. The Prohibition on Issuing New Bearer Shares
This prohibition on issuing new bearer shares was announced in May 2015. It has a nine month transitional period for existing bearer shares in issue which is due to end in January 2016. This means that any bearer shares currently in issue need to be swapped for ordinary shares by this date.
2. Appointing New Directors
From October 2015, appointments of new directors no longer need to be countersigned by the director being appointed. Instead, Companies House will contact the director directly to confirm their new appointment and, in the event that the appointment is not approved, Companies House will remove the appointment from the register. The precise date of implementation of this measure is unknown however it is expected to be over the coming few weeks so this is something that all companies need to be aware of.
3. The Prohibition on Corporate Directors
Save for a few exceptions, the prohibition on corporate directors comes into force in [October 2015]. It has a 12 month transitional period for existing corporate directors. However, one point that has not yet been finalised is corporate directors who are individuals, i.e. “natural persons” and whether they should be exempted.
4. The Register of Individuals with “Significant Control” Over an Unquoted Company
This is perhaps the most important requirement. Companies will have to maintain a register of individuals that have “significant control” over an unquoted company. The precise nature of this prohibition is currently unknown and guidance from the Government is eagerly awaited. This is particularly true in the context of ownership or control exercised through a partnership or trust and the level of disclosure that may be required in relation to the ultimate beneficial owners (if any) especially as the information that needs to be disclosed will be available to the general public from April 2016. We will, of course, update you when any announcement is made giving the necessary guidance.
If you would like further guidance or have any questions in relation to any of the above please do not hesitate to contact us. We will be happy to answer your queries and advise on what impact the new changes may have on your existing business.
For further information please contact Piers Larbey, partner and head of our corporate department.
The contents of this article are intended for general information purposes only and shall not be deemed to be, or constitute legal advice. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article.