Corporate key dates 2015/16
26th May 2015 – 26th February 2016: Bearer shares/ share warrants With effect from 26 May 2015, all companies are now prohibited from issuing any… Read more
26th May 2015 – 26th February 2016: Bearer shares/ share warrants
With effect from 26 May 2015, all companies are now prohibited from issuing any new bearer shares (i.e. unregistered shares, ownership of which is evidenced by the possession of a relevant share warrant), regardless of whether such issue is permitted by the company’s articles of association. In addition, any company with bearer shares on issue as at 26 May 2015 is required to implement a mandatory procedure for seeking the conversion of bearer shares into registered shares within the nine-month notice period ending 25 January 2016 (being the last date upon which notice may be given by the company to convert). Any bearer shares remaining at the end of such notice period must be cancelled by the company by way of application to the court and failure to do so will constitute an offence by the company and its officers.
The staged process of the conversion/cancellation procedure is summarised as follows:
- Voluntary surrender period: Any time up to 25 February 2015, a bearer of any share warrant may voluntarily surrender their bearer shares for conversion into registered shares.
- Company’s notice obligations: Notice of rights to surrender (and the consequences of failing to do so) must been given to any bearer shareholder by 26 June 2015 and must be given again before 26 January 2016 (if there are bearer shares remaining at such point). Failure to give such notice will constitute an offence by the company’s officers.
- Failure to surrender during first 7 months: In order to incentivise surrender, from 26 December 2015, all rights attached to bearer shares will be suspended automatically (including voting rights and rights to dividends or other distributions). In addition, any agreement to transfer any share warrants after this point will be void. The suspension will cease to have effect if the bearer shares are subsequently surrendered before the end of the surrender period and all dividends or other distributions (which are required to be deposited in a separate bank account in the interim) will be paid (plus any interest) to the bearer shareholder.
- Court application to cancel remaining bearer shares: During the three months following expiry of the surrender period, companies with remaining bearer shares must apply to court for their cancellation. The former bearer shareholders must be notified about the application within 14 days and immediate notice must also be given to the Registrar of Companies. Failure to make the application and provide the requisite notice will constitute an offence by the company and its officers.
- Making a cancellation order: If the court is satisfied that a company has fulfilled the notice requirements during the surrender period (or that the bearer shareholder had actual notice of the matters to be notified by other means), it must make a cancellation order. If it is not so satisfied, then it will make a suspended cancellation order. Where a suspended cancellation order is made, the company must notify the bearer shareholder, who will then have a two month grace period in which to surrender his bearer shares.
A company will be able to amend its articles without a special resolution or complying with any relevant entrenchment article for the purpose of removing a provision authorising the company to issue share warrants.
10th October: Reducing company strike-off period
The overall period it takes for a company strike off to be effected has been reduced from approximately 6 to 4 months.
April 2016: Register of persons with significant control
From April 2016, companies will be expected to keep a register of persons with significant control (including name, service address, country or state of usual residence, nationality, date of birth, usual residential address). From 30 June 2016, details of such persons will be required to be filed with Companies House.
A person with significant control over a company is defined as an individual that (either alone or as one of a number of joint holders of the share or right in question) meets one or more of the following conditions:
- The individual holds, directly or indirectly, more than 25% of the shares in the company;
- The individual holds, directly or indirectly, more than 25% of the voting rights in the company;
- The individual holds the right, directly or indirectly, to appoint or remove a majority of the board of directors of the company;
- The individual has the right to exercise, or actually exercises, significant influence or control over the company; or
- The trustees of a trust or the members of a firm (that is not a legal person) meet one or more of the other specified conditions in their capacity as such or would do if they were individuals, and the individual has the right to exercise, or actually exercises, significant influence or control over the activities of that trust or firm.
June 2016: Option to use central register
From June 2016, private companies will have the option of keeping the following registers with Companies House rather than maintaining separate physical statutory registers:
- Registers of members.
- Registers of directors.
- Registers of directors’ residential addresses.
- Registers of secretaries.
June 2016: Statement of capital
The requirement for companies to include the amount paid up and unpaid on each share is to be abolished. Instead, companies will be required to specify the aggregate amount unpaid on the total number of shares.
June 2016: Confirmation statement
A Confirmation statement will replace the annual return in June 2016.
The confirmation statement must be provided within 14 days of the end of the relevant review period (i.e. the period of 12 months beginning with the anniversary of the company’s incorporation).
The confirmation statement must include:
- Details of any change of registered office.
- Register of director(s), company secretary(s) and people with significant control.
- Any obligations that arise as a result of a decision by a company to keep any of its registers on the central register (see Option to use central register above).
- Details of where a company keeps company records if it uses a single alternative inspection location.
October 2016: Prohibition on Corporate directors
At some point during October 2016, the appointment of corporate directors is to be prohibited. This will mean that any such appointment will be void and constitute an offence of the company and its officers.
2016 (at some point): Share buybacks
As part of the government’s post-implementation review of the Companies Act 2006 (Amendment of Part 18) Regulations 2013 (SI 2013/999), it is proposed that at some point during 2016, buyback shares financed from cash are to be accounted for in the same way as buyback shares financed out of capital. This will mean that the repurchase of shares out of cash (up to a maximum of £15,000 or 5% of share capital) will no longer have to be made at nominal value.
2016 (at some point): Director overboarding
Given the importance for directors to have sufficient time to devote to their roles, Institutional and Shareholder Services is proposing to introduce an “overboarding” policy which recommends the number of directorships an individual may hold.
The proposed policy limits are:
- Executive directors are not expected to hold other executive or chairmanship positions. However, they may hold up to two non-executive directorships.
- A board chairman should not hold an executive position or more than one other chairmanship position. The chairman may hold up to three other non-executive directorships.
- A non-executive director (who does not hold an executive or chairmanship position) may hold up to four other non-executive directorships.
For more information, please contact Charles Claisse, Head of Corporate.