New regulations have been published, along with an explanatory memorandum, to ensure that the UK's company law framework can continue to function after Brexit.
The changes being made are largely technical. Broadly speaking, they ensure that the UK does not provide preferential treatment to EEA companies or EEA States.
The changes include the following:
UK company with EEA company as director or secretary
Currently, when appointing an EEA company as an officer of a UK company, less information has to be provided to the Companies Registrar compared to the appointment of a non-EEA company.
From exit day, those requirements will be amended so they are in line with the information required for non-EEA corporate directors and secretaries.
The additional information required is minimal. It is the legal form of the company and the law by which it is governed.
Companies with an EEA corporate director or secretary before exit day will have three months from exit day to update the particulars.
Overseas companies
If an overseas company opens an establishment in the UK, it has to provide certain information to the Companies Registrar.
The requirements are currently more limited in respect of EEA companies opening UK establishments, compared with non-EEA overseas companies.
From exit day, all overseas companies will be subject to the same requirements, whether they are incorporated in the EEA or elsewhere.
EEA companies opening UK establishments will also be subject to the same trading disclosures requirements as non-EEA companies. This will affect the information displayed on business letters, order forms and websites.
Overseas companies affected by these changes will have three months beginning on exit day to comply with the additional requirements.
Disclosure of protected information
Currently, the Registrar is allowed to disclose certain "protected information" (date of birth and address of company directors) to EEA (including UK) credit reference agencies.
From exit day, this will be restricted to those agencies carrying on business in the UK.
A one-year transitional period will be available.
Cross-border mergers
Regulations that allow mergers between UK companies and companies in EEA States to take place (the Companies (Cross-Border Mergers) Regulations 2007) are being revoked.
After exit day, the UK will no longer have access to the regime and EEA States will no longer be required to give effect to mergers involving a UK company.
Cross-border mergers will still be able to be structured through private contractual arrangements.
Next steps
If you are affected by any of these changes and would like further information, please get in touch with William McIntosh or your usual Brodies contact.
You can visit our Brexit Hub for regular updates on Brexit related issues, including our checklist of key questions businesses should be asking themselves to assess how ready they are for Brexit.
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