05 Apr 2016
Why you will now have to disclose much more about your business
From tomorrow (6th April), UK companies and limited liability partnerships will be required to maintain a record of people with significant control.
The PSC register has been designed to increase transparency over who owns and controls UK companies and will help inform investors when they are considering investing in a company.
It will also support law enforcement agencies in money laundering investigations.
Who do I need to declare?
An individual who meets one or more of the following conditions in relation to a company will be considered a person with significant control and must be recorded on the register:
- Someone who directly or indirectly owns more than 25% of the issued shares; or
- Someone who directly or indirectly holds more than 25% of the voting rights; or
- Someone who directly or indirectly is able to control the appointment or removal of a majority of the board of the company; or
- Someone who actually exercises, or has the right to exercise, significant influence or control over the company; or
- Someone who actually exercises, or has the right to exercise significant influence or control over any trust or firm (which is not a legal entity) which has significant control (under one of the four conditions above) over the company.
By definition, a PSC is an individual however, if a company is controlled by a legal entity that would fall within one or more of the above categories had it been an individual, then the company will require to note that entity on its PSC Register.
What steps need to be taken?
In order to compile the PSC register, each company is under an obligation to take reasonable steps to ascertain who is a registrable person in relation to it.
Such investigations by the company are to be made by notice to suspected registrable persons and a failure to take such investigatory steps, or to comply with the legislation, may result in criminal penalties for the company, its officers and/or the individual person.
Failure by the individual to respond to a company’s enquiries will give the company the ability to disenfranchise and impose other restrictions on any shares held by them.
From 30th June 2016, companies are required to file their PSC Register at Companies House at such time as the annual confirmation statement is filed. For the avoidance of doubt, the annual confirmation statement replaces the current Annual Return.
What information will be recorded?
For individuals on the PSC Register, the following information will need to be disclosed:
- Name;
- Service address;
- Nationality;
- Date of birth;
- Usual residential address; and
- The nature of the control exercised (i.e. one of the 5 conditions set out above).
A company’s PSC Register requires to be kept at its registered office (or single alternative inspection location) and be available for public inspection. The information on the PSC Register requires to be confirmed to Companies House at least once every 12 months.
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