The UK Government has introduced into parliament the Small Business, Enterprise and Employment Bill. This is the latest move by the Government to make it easier for small and medium enterprises, SMEs, to carry out their business without overdue bureaucratic interference, sometimes called “red tape”.
Britain is often referred to as, “a nation of shopkeepers”; a phrase attributed to Napoleon Bonaparte (who was actually quoting the famous British economist of the eighteenth century, Adam Smith). Nowadays, this could be adapted to describe Britain as “a nation of SMEs”: at the start of 2013, 99.9% of companies in the UK could be classed as SMEs, the definition covering any business employing fewer than 250 people. With a workforce of 25 million people and a combined turnover of £3.3bn, the SME sector is a vital part of the British economy.
It is essential that anyone investing in the British economy understands the importance of small business; is aware of such statistics; and keeps up-to-date with new legislation. This latest measure has yet to be passed by parliament, but once it has been through the parliamentary process it is highly likely that the main components of the Bill will become law.
These include:
- Requiring companies to identify those persons with significant control over the company and keep a publicly available register of those persons
- Preventing the creation of new bearer shares and requiring existing bearer shareholders to surrender their shares to the company in exchange for registered shares
- Prohibiting the use of corporate directors by UK companies, subject to limited exceptions
- Replacing the current requirement for an annual return with an obligation to confirm at least once in a 12-month period that all requisite information has been delivered to Companies House
- Removing the requirement for the statement of capital to specify the paid-up and unpaid amounts on each share and replacing this with a requirement to state the aggregate amount unpaid on the total number of shares
- Giving private companies the option of holding the information required by certain statutory registers (including the register of directors, directors’ residential addresses, members and secretaries) on a public register instead
The stated aim of the Bill is to open up new opportunities for small businesses to grow and compete; to obtain finance to create new jobs; and to encourage companies to innovate and to export. It is also specifically aimed at foreign investors, both to demonstrate that the UK continues to be recognised globally as a trusted and fair place to do business; and to deliver the UK’s commitments made to the G7 to introduce new rules requiring companies to obtain, and hold, information on who owns and controls them, thus increasing trust and encouraging investment and growth within the UK.
In brief, the message is: the UK is reducing red tape and is open to businesses of all sizes, as long as they are fair and transparent.
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