Changes to company law and corporate administration are due at the end of the year as part of the Small Business, Enterprise and Employment Bill (the Bill). The intention of the Bill is to help small and medium sized businesses compete and grow. By promoting accountability and transparency it is hoped that further investment will be attracted to the UK: Trust and integrity are deemed integral to enhancing Britain’s reputation as a place to do business.
The Bill is wide ranging – covering issues such as the regulation of pubs and childcare as well as minimum wage and zero hours abuses. So far publicity has focused primarily on invalidating exclusivity clauses in zero hours contracts. Other significant changes for SME’s in the Bill and on which we will provide greater detail in due course include:
– SME access to finance;
– Government to frequently review the burden of red tape:
– Providing greater simplicity and consistency to public sector procurement;
– Streamlining insolvency law;
– Reforming whistleblowing procedures; and
– Reducing delays in Employment Tribunals;
Below are the prime changes to company law and corporate administration.
1. More streamlined process to company registration and filings
2. A new register in respect of beneficial ownership (Persons with Significant Control – 25%) of private limited companies by shares
3. Abolition of bearer shares
4. Abolition of Corporate Directors
5. Updating of director disqualification regime
6. Statutory duties of directors to be applied to shadow directors.
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These changes and their implementation are/will be complex so there may yet be delays and there will be significant costs.
The assessment of the Department for Business, Innovation and Skill (BIS) projected a minor cost to the Government but the cost to business in the first year is estimated at £500m followed by £80m each year thereafter. Hopefully, these changes to company law and administration will improve transparency, but does this tally with the Government’s claims to reduce red tape and be supportive to small business?
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