The next phase of the Small Business, Enterprise and Employment Act is due to come into force this week, from Saturday 10th October, with the aim of reducing levels of red tape for small business owners and increasing overall transparency.
The three headline changes to the Act are not drastic and are likely to be viewed within the small business community as minor tweaks as opposed to streamline procedures.
The initial phase of the Act was introduced in May 2015 regarding bearer shares. Share warrants to bearer – known as bearer shares – were abolished. Any existing share warrants must now be surrendered within nine months.
This month’s phase is centred on the following issues:
Date of Birth
As of 10th October 2015, Companies House will no longer list the full date of birth of any company directors, in an effort to minimise the risk of personal fraud and identity theft. At present, directors’ full names, residential address, any other companies they’ve been involved with and their date of birth are listed on the Companies House web portal.
Nevertheless, anyone forming a new company will still be required to supply their full date of birth to Companies House.
Accelerated company strike-offs
Presently, limited companies that need to be shut down formally must be done so through the strike-off procedure. However, the procedure can only be used if the business hasn’t traded for the last three months and has no outstanding debts. Applications that meet these criteria are made and published in The Gazette.
This gives anyone who believes they are owed money by this company to object. Assuming no-one objects to the company being struck off it is closed down after three months.
The next phase of the Small Business, Enterprise and Employment Act will reduce this notice period to just two months to accelerate the shut-down process.
Digital ‘consent to act’ letters
At present, all limited companies must retain paper documentation at their registered office address, known as statutory registers. However, this next phase is gradually phasing out the need for paper documentation on-site, replacing them with digital versions.
Currently, when a company is formed the directors and secretaries must sign a form to say that they have chosen to take up their role within the company and accept their legal responsibilities. This is known as a ‘consent to act’. In the event something goes wrong with a company and they are sued or prosecuted it is often the company directors that will be summoned to court.
The next phase of the Act will automatically add a statement to company incorporation and officer appointment forms to confirm that new company directors and secretaries have consented to take on their legal responsibilities.
Directors and secretaries will no longer have to sign anything; it will be implied that they have agreed. Companies House will still write to new directors and secretaries to make them aware of their appointment and their statutory duties.