Persons of Significant Control and Abolition of Corporate Directors
Q. What are the changes and why are they happening now?
The Government wants get rid of faceless corporate directors and murky corporate beneficial ownership rights in a bid to increase transparency and reduce crime.
Change 1: Register of People with Significant Control – a new requirement
From 6 April 2016 companies will be required to collect and create a Register of People with Significant Control. This register will need to be filed with Companies House.
Significant control means If you directly, or through another company, have either:
1. 25% of the shares in the company; or
2. 25% of the voting rights in the company; or
3. the power to appoint or remove a majority of that board; or
4. the right to exercise significant influence or control over the company
The new register of people with significant control will also need to be reviewed and updated during the annual return filing process and on the incorporation of any new company from 6 April 2016.
Change 2: Abolishing Corporate directors
In October 2016 the Government plans to stop a company from appointing another company to act as its director, with a twelve month grace period to allow time for a company to find suitable replacements.
By October 2017, all Corporate Directors must be removed or replaced by individuals. The Government may create exceptions to this, but, for the moment, it is best to assume that your company will not be an exception.
Visit our Business Services page by clicking here
For more related articles click here.