From today (6 April 2016), the Small Business Enterprise and Employment Act 2015 brings into force changes to the registration requirements with Companies House for all UK incorporated companies (whether limited and unlimited) as well as LLPs Limited Liability Partnerships (LLPs).
Companies and LLPs are now required to keep a register of people who have significant control of the Company (PSC). It should be noted that the regulations deal separately with companies and LLPs due to the differing nature of the business structures.
A PSC for a company is a person who fulfils one or more of the following conditions:
- An individual who has direct or indirect ownership of more than 25% of the shares in the company;
- An individual who has direct or indirect control of more than 25% of the voting rights in the company;
- An individual who has a direct or indirect right to appoint or remove a majority of the company’s directors;
- An individual who exercises or the right to exercise significant influence or control over the company;
- Where a trust or firm would satisfy one of the first four conditions if it were an individual, any individual holding the right to exercise or actually exercising significant influence or control over the activities of that trust or firm should consider the relevant section in the statutory legislation to establish what should be included in the PSC register.
Once a PSC is identified, the details that must be recorded on the register are:
- Name, date of birth, nationality, country, state or part of the UK where the PSC usually lives and service address;
- Usual residential address (this not to be disclosed when making register available for inspection or providing copies of the PSC register);
- The date the PSC became a PSC (this date will be 6 April 2016 for existing companies);
- Which of the above five conditions for being a PSC are met;
- Whether an application has been made for the individual’s information to be protected from public disclosure.
From 30 June 2016, companies and LLPs must also file the above details with Companies House. Companies House will make all unprotected PSC information available to the public by a free of charge search facility.
Before today, companies only needed to record the immediate legal owners of its shares. From today, companies are required to go further and reveal any relevant persons who ultimately have significant control of the company, whether through their ownership of shares or not. The aim of this is to improve transparency as to ownership and to help advise investors who are considering investing.
As from today, the company’s PSC register should contain all of the above bullet pointed information, or where this information is still being sought, a note of this fact. The PSC register can never be blank, and so if there are no PSCs, this fact must be recorded.
A company is required to take reasonable steps to identify and contact any PSCs (or people who it believes have knowledge of who its PSCs are) to obtain and confirm the above information for the register. A refusal to provide the information when contacted is a criminal offence.
A failure by a company to provide accurate information on the PSC register is also a criminal offence.
The above mentioned offences are punishable by fine and/or up to two years imprisonment. In light of these sanctions, companies should ensure that they are thorough in the steps they take to identify and contact PSCs to ensure that they are not considered in breach of the requirements.
Our Company and Commercial Department, headed up by Rupert Rohan, is happy to assist you with any queries you may have on the above and on all aspects of Company and Commercial law.