Twelve reasons SME bosses should care about upcoming law changes

The Small Business, Employment & Enterprise Act comes into force shortly, covering 11 areas affecting small-to-medium-sized businesses.

01/04/2015, news

It also introduces a Pub Code and Pub Code Adjudicator to regulate the tied-pub sector. The Act will require Government to deregulate but there are also new obligations for businesses.

Andrew Pena, managing director and commercial law specialist at Cubism Law, has 12 reasons why business owners (and pub enthusiasts) should care about the Act.

1. The Act has introduced the Small Business Appeals Champion, one of five announcements in the 2012 Autumn Statement.

The Champion is designed to improve the interaction between regulators and those they regulate, ensuring better scrutiny of appeals and complaints made against non-economic regulators, and recommending improvements. It will be easier, quicker and cheaper for business to challenge and appeal the decisions of regulators.

2. The Act places considerable requirements on the Government to slash red tape, similar to the current target which demands two regulations phased out for each regulation implemented. This is supported by new reporting and transparency requirements, and better analysis of regulation and secondary legislation to avoid unnecessary burdens on business.

3. It supports SMEs seeking to expand overseas by improving access to export financing and redefining how it is used.

4. SMEs struggling to raise finance will benefit from the Act’s stimulus for competition in the banking sector by allowing alternative finance providers and new “challenger banks” to launch.

5. It will improve credit data sharing between banks and alternative lenders to assist companies turned down for funding from traditional banks, helping them to secure finance from other sources.

6. There are incentives to encourage better payment practices and reduce the impact of late payments, and ensure improvements in processing cheques. Changes to company filing requirements will remove duplication of some processes. Registering companies will be less complex and more accurate, and easier to update.

The Act includes measures to do away with some processes relating to company incorporations, and tax registration, which will be in force by May 2017. The Act also changes and modernises the Director Disqualification Scheme, including increased transparency over what can lead to disqualification.

7. The Act will give a statutory definition of a “small” and “micro” business to ensure the UK is finally compliant with EU recommendation 2003/361/EC, already widely used.

8. There were significant changes to public sector procurement policies, to ensure SMEs get better access to procurement markets, through streamlining and efficiency procedures which are consistent across the public sector. The Secretary of State now has powers of investigation of procurement practices to ensure consistency.

9. Companies face new transparency measures, particularly in share ownership, including keeping a register of people with significant control over a company, to deter illegal activity and foster better corporate behaviour.

10. Insolvency practices will be streamlined with improved oversight of Insolvency Practitioners, reduce abuse and strengthen regulation.

11. Protection for whistleblowers will be enhanced. The Act will penalise non-payment of employment tribunal awards, increase penalties for underpaying staff, make exclusivity in zero-hour contracts unenforceable, and recover exit fees from re-employed public sector workers.

12. It introduces an Adjudicator and a “Code” for the pubs sector to ensure best practice, and to give tenants obliged to be supplied by their Pub Company landlord the right to buy from other sources.

Source: The Telegraph Online