New Requirement – Register of People with Significant Control
Which companies are required to keep a PSC Register?
All UK companies, unless (i) they are listed on a regulated market in the UK, in an EEA state or on certain markets in Israel, Japan, Switzerland or the US or (ii) are already subject to chapter 5 of the Financial Conduct Authority’s Disclosure and Transparency Rules.
Who is a ‘person with significant control’?
A ‘person with significant control’ ("PSC") is an individual who meets one or more of the conditions below:
- He has direct or indirect ownership of more than 25% of a company's shares.
- He has direct or indirect control of more than 25% of a company’s voting rights.
- He has a direct or indirect right to appoint or remove a majority of the board of company directors.
- He exercises or has the right to exercise significant influence or control over a company.
- He exercises or has the right to exercise significant influence or control over activities of a trust or firm which itself meets one or more of the first four conditions.
Does the requirement to keep a PSC register apply to LLPs?
An individual in an LLP will be a PSC where he meets any of the following specified conditions:
- He holds, directly or indirectly, the right to share in more than 25% of the LLP's surplus assets on a winding up.
- He holds, directly or indirectly, more than 25% of the rights to vote on matters to be decided by a vote of members of the LLP (including rights only exercisable in certain circumstances).
- He holds, directly or indirectly, the right to appoint or remove the majority of persons entitled to take part in the LLP's management.
- He has the right to exercise, or actually exercises, significant influence or control over the LLP.
- He has the right to exercise, or actually exercises, significant influence or control over the trustees or members of a trust or firm that is not a legal person, where those trustees or members would meet any of the specified conditions (or would do if they were individuals).
What must companies do in light of the PSC Regulations?
Companies will need to identify people they know or believe have the right to exercise, or actually exercise, significant influence or control in the company. A PSC will be required to disclose to the company his interest in the company. Companies will be required to provide an initial statement about any PSCs to the registrar of companies on incorporation.
In some circumstances a legal entity (i.e. a body corporate) that owns or controls a company can be entered on that company’s PSC register (instead of an individual). A legal entity may only be entered on another company’s PSC register when the legal entity is subject to its own disclosure requirements.
On 6 April 2016 all non-exempt companies must have a PSC Register, and it must not be left blank, even if there are no PSCs or the investigation process is still underway.
What information will need to be disclosed and recorded in the PSC Register?
The PSC’s name, service address, nationality, country or state of usual residency, date of birth, the date on which he became a registerable person, the nature of his control over the company and his usual residential address.
How often does information need to be updated?
A company’s PSC Register has to be kept up to date. In addition, the public register at Companies House will have to be updated every 12 months as part of the new confirmation statement regime (which will replace the requirement to file an Annual Return).
What are the fees to obtain a copy of a PSC Register?
The fee for a single request for a copy of a company’s PSC register, or any part of it, will be fixed at £12.
What are the sanctions for non-compliance?
Sanctions for non-compliant individuals who do not provide information when requested include a fine and/or a prison sentence of up to 2 years. If an individual withholds information when requested by a company, the PSC Regulations permit the company to freeze a person’s rights in respect of the company by placing restrictions on their shares or the voting rights of that person.
A duty is imposed on companies to investigate and obtain information on their registrable persons and registrable relevant legal entities. Companies and every director or other officer in default will also commit an offence (punishable by imprisonment or a fine) if they fail to take steps to investigate.