Enterprise And Employment Act – What You Need To Know Monday, June 13, 2016
The Small Business, Enterprise and Employment Act 2015 came into force on 6 April 2016 and UK businesses need to be aware of just what this means for them - or run the risk of criminal charges.
As a result of this new Act, there are a number of implications for SME owners, including the fact annual returns have been abolished and Confirmation Statements will take their place from 30 June 2016, and that it is now necessary for Limited Companies and LLPs to start and keep up-to-date a Register of People with Significant Control (PSC).
The update has been introduced to increase trust in UK companies and reduce financial crime by making company ownership more transparent. It can be hard to know who owns and controls a firm, and the PSC Register should make this easier by stating clearly who owns and influences a company.
What Is A PSC?
A PSC is defined as anyone who owns or controls a company, provided they meet at least one of the following criteria:
- He/she owns more than 25 percent of the firm's shares
- He/she holds more than 25 percent of the firm's voting rights
- He/she has the right to appoint or remove the majority of the firm's board
- He/she has significant control or influence over the firm
- He/she has significant control or influence over a trust or company that itself meets the other criteria
What Do SME Owners Need To Do?
It is a legal requirement for businesses to take reasonable steps to establish if there are any PSCs in their firm - this ruling applies even to small companies with a single Director.
If someone meets the criteria, the business must confirm details of the PSC in the Register and then ensure the People with Significant Control Register is kept up to date
If no one meets the criteria, this must be entered into the Register as the Register cannot be left blank.
It's important the Register is completed accurately and the details are kept up to date to reflect any changes in the number of PSCs, or firms could face criminal charges for failing to comply.
For advice and guidance relating to the Small Business, Enterprise and Employment Act 2015 and how it impacts your business, our specialist solicitors are here to help. You can contact us in our London office on 08458605386 or email [email protected]
The contents of this article are for the purposes of general awareness only. They do not purport to constitute legal or professional advice. The law may have changed since this article was published. Readers should not act on the basis of the information included and should take appropriate professional advice upon their own particular circumstances.
