Charitable companies: new rules on providing information to Companies House

The Small Business Enterprise and Employment Act 2015 (the Act) introduced a number of changes to company administration. The Act is being implemented in stages; the latest tranche of sections came into force on 30 June 2016.

The following sections will be relevant to charities that are companies or have a subsidiary trading company

Section 92/93: duty to deliver confirmation statements instead of annual returns

Instead of completing an annual return at a set time of year, companies must now make a "confirmation statement", confirming that that they have sent Companies House all the information and documents they were legally required to submit since the date of the last confirmation statement (or since incorporation, in the case of the first confirmation statement). The information and documents in question are:

• changes of registered office;
• appointment or retirement of directors and secretaries;
• changes to information in the PSC register[1];
• changes to where company records are held (if they are not held at the registered office); and
• if the company has used the new powers to hold any of its registers at Companies House (see below), any amendments to the details in those registers.

Share companies have additional obligations to notify Companies House about capital and certain shareholder changes. 'Non-traded companies'[2] such as charity trading subsidiaries must deliver the following information (insofar as it has not already been notified to Companies House):

• the name (as it appears in the company's register of members) of every person who was at any time during the confirmation period[3] a member of the company;
• the number of shares of each class held at the end of the confirmation period by each person who was a member of the company at that time,
• the number of shares of each class transferred during the confirmation period concerned by or to each person who was a member of the company at any time during that period; and
• the dates of registration of those transfers.

Although confirmation statements can be submitted at any time, companies must deliver at least one in every twelve-month period. Failure to deliver them is an offence.

If a company has changed its principal business activity, it must notify Companies House of the change at the same time as it makes the confirmation statement. Principal business activities are categorised according to the Standard Industrial Classification of Economic Activities 2007.

To find out more about confirmation statements, you can read the guidance issued by Companies House.

Section 94/Schedule 5: option for companies to keep information on central register

These provisions allow private companies to hold the following registers at Companies House:

• members;
• directors;
• directors' residential addresses;
• secretaries;
• PSCs.

The process is similar for each. First, the company elects to hold the register centrally. In the case of the PSC register, those on the register must be notified at least 14 days before making the election and, if any of them object, the election cannot go ahead. In the case of the register of members, an election can only be made if all members have assented to it (and if the company does not hold any overseas branch registers).

The election is made by notifying Companies House[4]. From the date the election is registered, the company need not hold the register in question. However, it will need to keep the information it was required to hold on the register before making the election (referred to in the Act as a 'historic register'), and it will need to notify Companies House if anything on the register changes. The fact that an election has been made must be noted in the historic register.

An election can be withdrawn and, once Companies House has registered the withdrawal, the company must again keep the register itself (though it will not need to cover the period during which the election was in force).

The election to hold registers centrally can be made when promoters of a new company apply for incorporation.

Section 96: protection of information about a person's date of birth

In the past, anyone searching the register of companies could discover a director's full date of birth. Section 96 changed that, so that usually only the month and year of birth can be seen. The exceptions to this are:

1. where the information was viewable before section 96 came into force;
2. where the company has elected to hold the relevant register centrally.

In those cases, the full date of birth will still appear.

Most of this section was brought into force last year but parts of it could not be, because they related to provisions that had not yet been implemented, such as the duty to keep a PSC register and the power for companies to hold certain registers online. The remaining portions are now in force.

If you would like to know more about the Act generally, you can read the Companies House guidance.

If you require further information on anything covered in this briefing please contact Rachel Holmes ([email protected]; 020 3375 7561) or your usual contact at the firm on 020 3375 7000. Further information can also be found on our Schools page.

This publication is a general summary of the law. It should not replace legal advice tailored to your specific circumstances.

© Farrer & Co LLP, July 2016

[1] The requirement to keep a PSC register, or register of people with significant control, was also introduced by the Act. For more about this, please see our article here.

[2] The Act defines these companies none of whose shares were, at any time during the confirmation period concerned, admitted to trading on a relevant market or on any other market outside the United Kingdom

[3] I.e. the period since the last confirmation statement was submitted (or since incorporation, in the case of the first confirmation statement).

[4] This can be done online or by using the appropriate new Companies House form.