Welcome to the first edition of the KPMG Global Entity Management (GEM) Quarterly Newsletter. This edition contains an introduction to KPMG GEM Services and our quarterly Company Secretary Association, plus details of reporting changes impacting UK entities, changes to registration procedures for Foreign Investments in Ukraine, a spotlight on Sociedad Por Acciones (SAS) companies in Mexico and updates to annual accounts filing deadlines for Dutch companies.
Multinational clients are facing huge challenges with rapid globalization, ever-changing legal structures and internal pressures to increase efficiencies and reduce costs. Our KPMG GEM Services focus on the delivery of integrated corporate secretarial services for corporations with a global presence.
The service splits into two key areas, a Core Annual Service to cover all the routine requirements you would anticipate an entity encountering each year, and ad hoc services such as changes to entities (including name changes, registered office changes, etc.) and incorporation services.
Core service clients will be assigned a project manager within the GEM team who is dedicated to ensuring that the service is provided to a high standard. The project manager will collaborate with teams across the global network to coordinate corporate secretarial work, providing clients with one main point of contact who can provide updates on all jurisdictions. Other benefits of our solution include:
On 26th July, GEM Services teamed up with Makinson Cowell, a division within KPMG which provides advice to companies about investor relations, to launch the Company Secretary Association in London. This is a forum for Company Secretaries to share experiences, discuss concerns, review real life scenarios, and hear from experts across a variety of fields to support them in the ever increasing role and responsibilities of a Company Secretary.
The event was a huge success, with the majority of attendees from FTSE 100 or FTSE 250 companies and Amanda Mellor and Seamus Gillen as our guest speakers. Amanda, the Group Secretary and Head of Corporate Governance at Marks and Spencer, discussed the current challenges facing company secretaries and how M&S are approaching those issues. Seamus Gillen is a Director of ValueAlpha, which offers high quality governance advisory services, and is also the former Policy Director of the Institute of Chartered Secretaries and Administrators. Seamus discussed the evolution of the company secretary role, and its strategic importance to companies and boards. It was a great opportunity for Company Secretaries to discuss hot topics and network with like-minded professionals.
The Company Secretary Association will be held on a quarterly basis, with the next event scheduled for October.
The Small Business, Enterprise and Employment Act 2015 (SBEE) has introduced a number of changes impacting UK registered entities.
Persons with Significant Control (PSC)
Un-listed companies and LLPs are now required to maintain a register of people exercising significant control from April 2016.
The deadline for this new requirement has now passed. Therefore we recommend that you take immediate action to meet these requirements for all relevant UK entities within your group should it still be pending. The company/LLP and each of its officers commits an offence (punishable on conviction by imprisonment or a fine) if the company/LLP fails to comply with the requirements.
Additionally, in June 2016 the current obligation for companies to file an annual return was replaced by a Confirmation Statement to be submitted once per year to state that the company information is still accurate and provide details of relevant changes, where necessary. Any annual returns due from 30 June 2016 have been replaced and companies will be required to provide details of their PSCs within their Confirmation Statement.
On 31 May 2016, the Ukrainian Parliament passed a law On Amendments to Certain Legislative Acts of Ukraine on Abolishment of Mandatory State Registration of Foreign Investments (the Amendment). The Amendment repealed provisions of the Ukrainian Commercial Code and Law of Ukraine On Regime of Foreign Investment, which provided for state registration of foreign investments.
Previously, non-registered foreign investments were not granted preferences and guarantees under investments legislation, for example guarantees against changes to foreign investments legislation and guarantees on forcible withdrawal of foreign investments and illegal actions of state authorities. Under the Amendment, both registered and non-registered foreign investments shall now enjoy the same preferences and guarantees.
Adoption of this Amendment is one more step towards improvement of the investment environment of Ukraine and deregulation of business.
Simplified Stock Companies were introduced in 2008 in Colombia and now represent up to 95% of the companies in the country due to the simplified incorporation process and less stringent company law requirements. Due to its success, SAS companies are now being adopted in other jurisdictions in Latin America. On 14 March 2016, Ley General de Sociedades Mercantiles (General Law of Business Entities) was amended to allow for the formation SAS companies in Mexico.
Like in Colombia, the key benefit to SAS companies in Mexico is the simplified incorporation process which is managed by the Secretara de Economa (Ministry of Economy) through an electronic system. This process means that incorporations for smaller companies can be finalized within 24 hours and formalization before a notary public is no longer required. In order to complete the incorporation, shareholders must have a Firma Electrónica Avanzada (electronic signature) which is issued by the tax authorities.
Once established, SAS companies do not have a separate legal reserve from annual profits and the profit must not exceed $5,000,000 Mexican Peso otherwise the entity is required to convert to a different entity type.
Last year, the Dutch Civil Code was amended to reduce the period by which companies can extend the deadline to prepare the annual accounts. The deadline for preparing the accounts in ordinary circumstances remains unchanged, i.e. within 4 months of financial year end (FYE) for listed companies and within 5 months of FYE for B.V.'s and non-listed N.V.'s.
Dutch companies have the option to extend the deadline in extraordinary circumstances and it is this extension period that has been amended from 5 months to 4 months for listed companies and from 6 months to 5 months for B.V.'s and non-listed N.V.'s. As companies then have 2 months to adopt the accounts in a general shareholders meeting, the ultimate deadline for filing is now 10 and 12 months following FYE for listed companies and B.V.'s and non-listed N.V.'s respectively.
Although this change came in to effect on 1 November 2015, this applies to financial years starting from 1 January 2016 and will therefore apply to companies relying on extensions this year.