As we write, in the UK, the Small Business, Enterprise and Employment Bill is progressing through the committee stage of the House of Lords. It is expected that it will complete its parliamentary process shortly and be passed into law before the rising of the current Parliament. It is interesting that only in the bill’s later stages have some members of the two Houses begun to pass comment as to the unwelcome new burdens this legislation will impose on growth business. However, it must be anticipated that the bill will be passed into law in something closely resembling its current form.
BIS has recently published a revised timetable for implementation of the legislation and it now seems that substantive provisions will be accelerated and come in to force from 1 October 2015. The UK government is very keen to get these amendments to the Companies Act 2006 implemented as quickly as possible. The legislation itself has been rushed through Parliament with wide all-party support. The UK is keen to deliver against promises made by the Prime Minister at the G7 Lough Erne Summit in 2013.
Companies do not have very long to:
- put in place a register of persons with significant control;
- restructure those boards where corporate directors will no longer be permitted (see further Exceptions to the ban on corporate directors); and
- (for a very small number of companies) remove bearer shares.
Unless otherwise exempt, companies will need to maintain a publicly accessible register of people with significant control over it in addition to its register of members. Both statutory and non-statutory guidance is to be prepared to clarify the meaning of the key words “significant influence or control”. BIS has just announced the establishment of a working group of experts to develop the required guidance led by Peter Swabey, policy director at the Institute of Company Secretaries and Administrators.
Cutting red tape?
Upon entering office in 2010 David Cameron announced that “supporting business is a crucial part of our long term economic plan” and that he claimed to “have insisted on slashing needless regulation”. The Small Business, Enterprise and Employment Bill will add about 60 clauses and 8 schedules to the Companies Act 2006 and lead to hundreds of pages of new, complex technical regulation. David Cameron’s “Red Tape Challenge” seems to be a long-forgotten memory of the coalition government.
By Edward Craft