Charitable companies will need to be aware of the impact of the Small Business, Enterprise and Employment Act 2015 (SBEE). The aim with this Act is to increase transparency over who controls companies. From April 2016 companies need to maintain a register of individuals who or legal entities that have control over them. This is in addition to the current requirement of maintaining a register of members and directors’ interests.
Failure to keep a register will be a criminal offence, and companies will need to submit this information to Companies House by 30 June 2016 when making their annual confirmation statement, which will replace the current Annual Return requirement.
The department for Business, innovation and Skills (BIS) has produced guidance on what a person with significant control is. A PSC is an individual who meets one or more of the following conditions:
- Directly or indirectly owns 25% or more of share capital;
- Directly or indirectly holds 25% of voting rights;
- Directly or indirectly have power to appoint or remove majority of directors;
- Has right to or actually does control the company;
- Has right to or actually controls a trust which controls a company
The above information should be entered onto the register. Companies will be able to maintain their own register or elect to use the central register and keep this up to date at Companies House.
For charitable companies, it is unlikely that there will be a person of significant control unless there are 3 or fewer trustees. However often charitable companies control trading companies, and therefore an entry will need to be made for that company.