Does your company have a register of people with “significant control”? From 30 June 2016, companies will have to deliver information to the Companies House PSC Register annually.
- New register of people with “significant influence or control”
- Failure to maintain a register is a criminal offence
- PSC Register data must be submitted to Companies House
Since 6 April 2016 companies and Limited Liability Partnerships (“LLPs”) are required to keep a register of people with significant control (“PSCs”) and of registrable legal entities (“RLEs”) having control over the company in the relevant sense.
A person will be a PSC if they are an individual and any one or more of the following apply:
- They directly or indirectly hold more than 25% of the shares of the company, or in the case of LLPs, rights to more than 25% of surplus assets on winding up; or
- They directly or indirectly hold more than 25% of the voting rights; or
- They directly or indirectly have the right to appoint or remove a majority of the directors; or
- They otherwise have the right to exercise or do actually exercise significant influence or control; or
- They have the right to exercise or actually do exercise significant influence or control over the activities of a trust or firm which is not a legal entity but would itself satisfy any of the first four conditions if it were an individual.
There is government guidance as to the meaning of “significant influence or control”.
The company’s register (the “PSC Register”) must record, for each PSC:
- Full date of birth;
- Country/area of residence;
- Service address;
- Residential address;
- Date on which became a PSC; and
- Which of the conditions for being a PSC are met.
The information should be confirmed in the appropriate manner with the PSC. Failure to have a register (or to keep the information in the register up to date) is a criminal offence.
There are required forms of wording if the information has not been confirmed or if, despite having taken reasonable steps to identify PSCs, the information is not available. The overall requirement is that a company’s PSC Register should never be empty (even if its contents are as bland as, “the company knows/has reasonable cause to believe that there is no registrable person or registrable relevant legal entity in relation to the company”).
Information in the company’s PSC Register, except for the residential address of the PSC, must be provided to the public within 5 working days of receipt of a request in the appropriate form (including an explanation of the purpose for seeking the information). A fee of up to £12 can be charged for provision of the information.
Whilst a PSC must be an individual it will, occasionally, be necessary to enter a legal entity on the PSC Register. This will occur when the legal entity is both “relevant” (amongst other things satisfying at least one of the five criteria for a PSC set out above) and “registrable” (being the first relevant legal entity in the company’s ownership chain).
From 30 June 2016 companies will have to deliver the information in the PSC Register annually to Companies House together with a Confirmation Statement confirming its accuracy (which will replace the Annual Return). All information from the PSC Register will be made available on the central public register except exact dates of birth of PSCs (month and year will be given) and their residential addresses.
There is (or will be) an option for smaller companies to keep their PSC Register directly with Companies House (rather than keeping their own register). In this event all information in the Register will become public and the information at Companies House will have to be kept up to date “in real time.”
After 30 June 2016 those seeking to incorporate a new company will have to send a statement of initial significant control to Companies House alongside the other documents required for an application to incorporate.
This article is not legal advice and is intended for guidance only. If you would like or need legal advice regarding PSC registration requirements and other compliance matters please contact Martin Reynolds and Rob Jefferies in the Company and Commercial Team at Barrett and Co in Reading, Berkshire, on [email protected] [email protected] or 0118 958 9711. Or book a fixed-fee £95 one hour consultation online now.
Martin Reynolds, Senior Commercial Solicitor, Barrett & Co, Reading
Find out more about the implications of "people with significant influence or control" for your business by booking a £95 one hour consultation with Martin Reynolds or Rob Jefferies from the Company and Commercial Team at Barrett and Co in Reading, Berkshire