Jonathan Wilson of Accountants Barnett & Turner examines the recent requirement for UK companies to keep a Register of People with Significant Control… Under new rules, which came into effect on 6 April 2016, companies and Limited Liability Partnerships (LLPs) must now compile and keep an up-to-date Register of People with Significant Control (PSC). The aim of this register is to help increase transparency about who ultimately controls UK companies.
Who counts as a PSC?
First of all, a person qualifies as a PSC if they own 25% or more of shares in a company or own 25% or more of voting rights. Alternatively, they will need to be listed if they own the right to appoint and remove the majority of the board of directors. (These conditions can be met directly or indirectly – for example, through another company – and include interests of close relatives such as a spouse or dependant.)
It is also a requirement that anyone who holds significant interest or control over a company should be listed as a PSC, along with trustees or partners who satisfy any of the conditions described above.
The recording process
This information needs to be reported to Companies House on the annual confirmation statement (which will replace the annual return from 30 June 2016). Changes to the PSCs need to be updated immediately on the company’s own register and at Companies House on the next confirmation statement.
A company’s PSC register needs to be made available for public inspection on request but a company must not divulge the normal residential address of a PSC.
For each PSC, the following details must be included on the register:
- Service address
- Usual country of residence
- Date of birth
- Usual residential address
- Date of becoming a PSC
- Nature of control
By definition, a PSC is an individual. If, however, a company is directly controlled by a UK legal entity, then that legal entity must be included as the PSC. A legal entity needs to be included in the register of another company if it meets one of the conditions described above, keeps its own PSC register and has a direct interest in the company. It is important to establish ultimate ownership when identifying PSCs where a company is owned or controlled by another business.
Most overseas companies are not PSCs and therefore do not have to be disclosed, but the ultimate PSC still needs to be established. The Department for Business Innovation and Skills has confirmed that, where – for example – an unquoted Swiss-registered company owns a UK company, information about the PSCs of the Swiss company would have to be disclosed.
It is important for the directors of a company or members of an LLP to corroborate the information about a PSC (and keep evidence of that corroboration), as failure to provide accurate information on the register is a criminal offence.
If the entity does not have any PSCs (because there are no persons who hold 25% or more of the shares or control) then the register must state:
“The company knows or has reasonable cause to believe that there is no ‘register-able’ person or ‘register-able’ relevant legal entity in relation to the company.”
The register cannot be left blank.
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If you would like to discuss anything related to this article please do not hesitate to call Barnett & Turner on 01623 659659 or email Jonathan at email@example.com