As part of the implementation of the Small Business, Enterprise and Employment Act 2015, there are a number of changes to the process of incorporating new companies. If you form a new company from 30 June 2016, you’ll need to provide some additional information as part of the application. Inform Direct has been updated to take account of changes – and, as ever, we’ve made everything as straightforward to use as possible, helping to save you time.
Here’s our rundown of the changes being made to incorporations:
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1 SIC codes
Before 30 June 2016, the only time a company’s SIC code(s) are reported to Companies House is in the annual return, so new companies have only reported the nature of their business at the anniversary of forming the company.
Going forward, as part of the incorporation process a company must include details of its planned business activities by selecting up to four SIC codes. It’s possible, of course, that by the point of the company’s first confirmation statement (which replaces the annual return from 30 June 2016) the nature of the business may have changed. In that case, the company should amend the SIC codes as part of the confirmation statement.
Any incorporation application from 30 June 2016 which does not include a valid SIC code will be rejected by Companies House. (Inform Direct automatically checks that you’ve entered one.)
2 People with Significant Control
Existing companies have been required to create and maintain a register of people with significant control over the company from 6 April 2016. This includes details of persons – both individuals and companies – who meet certain conditions, largely related to the level of their shareholding or other significant means of control over the company and its decisions.
From 30 June, when a new company is formed, a ‘statement of initial significant control’ must be provided, which provides details of all persons with significant control (“PSCs”).
For an individual PSC, the following details must be submitted in the incorporation:
- Date of birth
- Service address
- Country of residence
- Usual residential address
- Details of the nature of their control over the company, based on specific defined categories
- Any restrictions on disclosure of the PSC’s details that are effective
These details are similar to those currently provided for an individual director.
While, for existing companies, it’s possible to report abbreviated information where a PSC’s full details – or even their identity – are not yet known, as part of an incorporation the particulars must be provided in full.
For a relevant legal entity (including most companies), the following details must be submitted in the incorporation:
- Registered / principal office (which in effect acts as a service address)
- The company or other register on which the company appears
- The company’s registration number
- The legal form of the entity
- The law under which the RLE is governed
- The nature of their control over the company – again, based on defined categories
The details requested are largely similar to those already provided for corporate directors and secretaries.
In some cases, a company might be formed without any PSCs because there is no individual or corporate entity that meets any of the prescribed criteria. In that case, a specifically worded statement must be submitted saying that the company has no PSCs on formation.
Inform Direct has been updated to make it straightforward to record PSCs in incorporations from 30 June 2016. While the legislation may be complex, we make it as simple as possible to provide the right information first time, with a minimum of effort.
3 Statement of capital
The content of the statement of capital for companies limited by shares is changing from 30 June.
You can read about the details in our article covering changes to the statement of capital, but rest assured that on company incorporations Inform Direct will do all the work for you. You’ll just need to enter details of the shares being issued and we’ll do the rest, creating a fully compliant statement of capital to submit to Companies House as part of the company formation.
4 Holding statutory registers at Companies House
From 30 June, a company can elect to keep certain statutory registers at Companies House rather than maintain them in house. However, there are disadvantages which have caused Companies House to question whether many companies will want to do so, especially because otherwise private information will be displayed upon the public record.
Where permitted, a company can make an election to keep one or more registers at Companies House as part of an application to incorporate a company. However, since Inform Direct provides a suite of automatically generated online registers, our customers already get the best of both worlds without having to expose themselves to any of the disadvantages.
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