News

18-11-2015

Nickolas Likhachov named 4 main changes in business conditions in Great Britain, – Forbes

Nickolas Likhachov named 4 main changes in business conditions in Great Britain, – Forbes

Recently, business property rights protection were guaranteed by the advantages of British jurisdiction, which were used by the entrepreneurs. They have secured and controlled their assets through the companies, registered in the UK. Nevertheless, the Small Business Enterprise and Employment Act, adopted on 26 March 2015 has significantly changed the system of coordinates for the business conditions in Great Britain. The key provisions of the Act comes into force as of 2016 and are designed to address the business transparency issues.

Among the main changes, which are already in force as well as changes which will be in force in 2016 are the following:

1. As of May 2015, English companies are not allowed to issue the bearer shares, which do not have the indication of the real shareholder’s details. This amendment makes impossible the non-disclosure of the shareholder’s personality. The companies that have bearer shares shall convert them into the Authorized capital on or before the January 2016.

2. From October 2015, legal entities will not be able to serve as the companies’ directors anymore (there was usual practice to appoint a legal entity to serve as the director of English company). In accordance with this amendment, a lot of English companies will have to change their directors to individuals.

3. UK Companies House gets the right on its sole discretion to change the registered address of the company, if the complaint was filed on behalf the owner of registered address, where the company has been registered.   In that case, the company will have the right to provide the evidence that the used registered address is its valid and true legal address. Alternatively, the Companies House will recognize the director’s residential address as the company’s valid legal address. And that could become the major problems for the company is the case if the director of such company is not a resident of the UK.

4. The new public Register of the Persons with Significant Control will be introduced as of January 2016. There will be the data about those persons who:

– directly or indirectly own more than 25% of the nominal authorized capital;

– directly or indirectly control more than 25% of votes on the General Shareholders Meeting of the Company;

– directly or indirectly be able to  control the appointment and removal of the majority of the board of the company;

– exercise (or may have the right to exercise) a significant control or influence on the company;

– exercise (or may have the right to exercise) a significant control or influence on the trust or an individual who is not an entity in the case if that trust or individual who is not an entity, has a significant control (under one of the conditions above) over the company.

The Government of Great Britain requested to draft the instructions with the interpretation of who may be deemed as the Person with Significant Control.

It is also worth noting, that this Register would be open to public on the site of the state body – Companies House. The companies are obliged to prepare the respective information on or before April 2016 and to file the information to the Register until June 2016

Should the company or its officers fail to comply with the above-mentioned requirements of filing information to the Register, the company may be penalized and the officers of the company may be even imprisoned.

Taking into consideration the above, perhaps it is not necessary to delay the moment of fulfillment of the requirements of the Act until the last moment. The price paid for carelessness may be too big. Moreover, in practice, it is always possible to find an acceptable way out from any difficult situation.