This intentionally wide-ranging Act is said to pave the way for businesses to get improved access to finance, create a fairer provision for tied pub tenants and put an end to zero hours exclusivity clauses. However it also makes changes to the Companies Act 2006 which affects who can be directors. In some cases the board may require restructuring and all will need to modify their procedures for the appointment of new directors.
UK companies are currently required to have one natural person as a director but may appoint corporate entities as additional directors if they wish. The SBEEA will amend the Companies Act 2006 (CA) and requires all directors be natural persons. This change is now scheduled to come into effect in October 2016 (it has been put back from October 2015). Existing companies with corporate directors will have one year after the amendment comes into force to remove and/or replace any corporate directors, i.e. by fourth quarter of 2017.
Section 104 introduces amendments to the Company Directors Disqualification Act 1986 allowing the court to disqualify a director of an insolvent company if they have been convicted of certain offences overseas and the due diligence procedure carried out by a company prior to appointment of a new director should now include making enquiry as to any such relevant offences.
A new section 790 M of the CA 2006 is added which requires companies subject to Part 21A to keep a register of people with significant control over the company (the PSC register) which should include particulars of individuals who exercise significant influence or control of the company and anyone who holds, directly or indirectly, more than 25% of the shares. There are similar provisions that apply to LLPs.
For more information or any enquiries please contact corporate law partner Tony Mead on Tony.Mead@dwfmbeckman.com or call 020 7408 8888.