UK Company Law: Changes in 2016

This year Companies House introduces some important changes to UK company law. We have provided some of the key changes and the proposed implementation dates.

New accounting regulations for companies - January 2016

The regulations apply to accounting periods beginning on or after 1 January 2016. The key change in these regulations is the removal of the ability for a small or medium-sized company to file abbreviated accounts at Companies House (although the very smallest companies can prepare micro entity accounts).

New accounting standards - January 2016

The Financial Reporting Council (FRC) have revised the accounting standards under which UK companies prepare their accounts. More information about this change can be found on the FRC website. Some of the main changes:

• a new statement is required to be delivered in a set of small company abridged accounts to indicate the members have agreed to the abridgement

• the thresholds for a company size have changed. For a small company the turnover limit rises from £6.5m to £10.2m and balance sheet total limit rises from £3.26m to £5.1m. The total number of employees remains at a maximum of 50

• for a medium-sized company the turnover limit rises from £25.9m to £36m and the balance sheet total limit rises from £12.9m to £18m. The total number of employees remains at a maximum of 250

Register of People with significant control (PSC) - April 2016

Companies, LLPs and SEs need to keep a register of people with significant control (‘PSC register’) from 6 April 2016. A PSC is anyone in a company, LLP or SE who meets one or more of the conditions listed in the legislation. This is someone who:

• owns more than 25% of the company’s shares

• holds more than 25% of the company’s voting rights

• holds the right to appoint or remove the majority of directors

• has the right to, or actually exercises significant influence or control

Confirmation statement replaces the annual return - June 2016

The annual return is being replaced by confirmation statement from 30 June 2016. The confirmation statement is intended to serve roughly the same purpose as the annual return: for companies to provide up-to-date information for inclusion on the public register. However, one main difference is that you need to check and confirm the company information held is accurate.

Another notable difference is that in your first confirmation statement you’ll also need to include the information held in your people with significant control (PSC) register.

Statement of capital changes - June 2016

Statement of capital will be simplified from 30 June 2016. The changes remove the requirement to show the amount paid up and unpaid on each share. Instead, you now need to show the aggregate amount unpaid on the total number of shares. You will only need to provide a full statement of capital where changes have been made during the year.

Changes to Companies House fees – June 2016

Companies House some fees including registration and search are changing from 30 June 2016.

Corporate directors - October 2016

It’s expected that from October 2016, you won’t be able to appoint corporate directors (although there are some limited exceptions). All company directors will have to be ‘natural persons’.

More information you can find on the Companies House website.

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