The Small Business, Enterprise and Employment Act 2015 introduced a number of measures to increase the transparency of UK companies by making it easier to see who owns or controls them and who might be making decisions about how they are run. Key to this was the requirement to maintain a public register of people with significant control. From April 2016 UK companies will have to provide this information to Companies House when they deliver their confirmation statement (which replaces the annual return).
What is the PSC Register?
From April 2016, most companies in the UK will be required to maintain a register of “persons with significant control” (“PSC Register”). The concept of the PSC Register was introduced last year and is aimed at improving transparency in UK companies by identifying their ultimate beneficial owners. Similar measures will be introduced across Europe under the Fourth Money Laundering Directive from June 2017.
Who needs to keep one?
All private limited companies registered at Companies House must have a PSC Register from April 2016, and from 30 June 2016, must send details of their PSC Register to Companies House annually with its confirmation statement (which replaces the previous Annual Return). For any application to register a new company, a statement of initial significant control must be filed at Companies House at the point of incorporation from June 2016.
A PSC Register is not required from PLCs or other similar entitles that trade on a regulated market within Europe.
Who is a “person with significant control”?
A company’s PSC Register should identify individuals or relevant legal entities who ultimately own or control more than 25% of a company’s share or voting rights, or who can otherwise exercise significant influence or control over a company and its management.
Where a company has no person with significant control, a PSC Register is still required and should confirm that there is no relevant person or entity.
What should be included?
Details of personal information for individuals are required (like name, address, and date of birth). For legal entities, details of company name and number, registered office and relevant company register will be required.
In all cases, details of the nature of control exercised should be included and where the control relates to holding of shares or voting rights, the general extent of the holding should be detailed.
What is the impact of the new requirement?
Unfortunately for existing companies, the introduction of the PSC Register will mean additional paperwork as they collect the required details from individuals or legal entities. Some companies may find this difficult where it is not clear who the ultimate beneficial owner is. For new companies, it is likely to be easier as relevant questions can be asked from the outset. Companies should contact relevant individuals and/or legal entities for the information required for the PSC Register. There is also a proactive disclosure obligation on individuals and legal entities to provide such information to companies (even if it is not requested by a company).
If information is not provided, companies can impose restrictions on any shares or voting rights held. While there are criminal penalties for failure to maintain a PSC Register, the most effective way to prevent non-compliance is likely to be the threat of restrictions on shares or voting rights.
If you would like any assistance or further guidance on this topic, please contact a member of the Blackadders Corporate Team.
Solicitor - Corporate & Commercial