Changes to company formation rules in the UK from June 2016

Companies House – the UK government agency which acts as the registrar for companies in the UK, has recently introduced some changes which affect the information that needs to be supplied when forming a company in the UK. From 30th June 2016, people establishing new companies need to supply additional information about Persons of Significant Control (PSCs) and Standard Industrial Classification Codes (SICs). There are also additional rules relating to Confirmation Statements, Statements of Capital and Statutory Registers.

PSC registers

UK Companies will now need to identify Persons of Significant Control during the company formation process. The objective of identifying PSCs is to increase transparency over who owns and controls companies in the UK and provide more relevant information to investors.

What is a PSC?

A person with significant control (PSC) or influence, is a person who controls or owns a company.

A PSC is defined as someone who meets one or more of the following aspects:

  • Holds more than 25% of shares in the company
  • Has more than 25% of the company’s voting rights
  • Can appoint or remove the majority of the company’s board of directors
  • Has the right to exercise, or actually exercises significant influence or control over the company
  • In the case where a trust or firm has the same levels of significant influence and control as outlined in the four points above, the person who controls the activities of that trust or firm is also considered to be a PSC

All companies must declare their PSC (or PSCs) as part of the company formation process and then keep a PSC register within their statutory compliance documentation. Existing companies must also update Companies House on their PSC information.

Expert company formation agents in the UK like The Company Warehouse can support start-ups with this process.

SICs

Standard Industrial Classification (SIC) codes are used in the UK to classify businesses into different industries. SICs are aligned with European codes so that the same nomenclature is used across the EU. The changes that have been introduced mean that new companies now need to state an appropriate SIC code during company formation, rather than when filing their first annual returns to Companies House – as was previously the case.

A full list of SICs can be found on the UK Office for National Statistics site.

If you are considering forming a company in the UK, the Company Warehouse can provide expert support and advice and help you to identify the correct SIC codes for your business.

Confirmation Statements

Confirmation Statements have now replaced Annual Returns and need to be completed every year. This change mean that Companies House will now tell companies what it believes to be the correct information about them which they will need to confirm – or identify any necessary changes.

Additional changes

There are a number of other significant changes which were introduced into law in the UK on 30th June. These relate to Statement of Capital and also the statutory registers that all companies need to keep. Statements of Capital have been simplified to improve the quality of information in them and it is now possible to have company registers stored centrally at Companies House.

If you are considering setting up a company in the UK, The Company Warehouse is a registered filing clerk and expert on company formation and will support you throughout the process and help you to comply with the 30th June changes.  Take a look at their web site for more information or contact one of their expert business consultants direct.