People with Significant Control – the basics
Companies are now required to maintain a register of people with significant control and from June 2016, they must file this register at Companies House as part of the new “check and confirm” process, which is replacing the annual return. The PSC register is an additional statutory register. It is also being referred to as the register of beneficial owners and is part of the government’s drive to increase transparency, particularly in relation to tax affairs and its anti money laundering efforts.
What goes on the register?
The information on the register will include the name of the PSC, registered and service addresses, date of birth and nationality. The date the person became a PSC also needs to be recorded and the reason for their inclusion on the register.
What is a PSC?
A PSC includes any person who:
- holds more than 25% of shares in a company (or for an LLP, holds the right to share in more than 25% of any surplus assets of the LLP on a winding up);
- holds more than 25% of voting rights in a company or LLP;
- holds the right to appoint or remove the majority of the board of directors of a company (or the majority of the persons who are entitled to take part in the management of the LLP);
- has the right to exercise, or actually exercises, significant influence or control over a company or LLP; or
- 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 in relation to a company or LLP.
Which companies are affected?
The register applies to unlisted companies limited by shares or by guarantee, unlimited companies, LLPs and Societas Europeas registered in the UK. Listed companies (including those on AIM and ISDX) are exempt but their subsidiaries still need to comply.
Identifying PSCs and maintaining the register
Key points are:
- Companies will need to investigate the identity of any person they know to be (or have reasonable cause to believe should be) on the register.
- Companies must take reasonable steps to identify any PSCs if they do not know who they are.
- Notices must be sent to people to confirm their status and records kept.
- Those who should appear on the register also have an obligation to notify the company of that fact.
- There are prescribed sets of wording which must be used to note the current status of any entries in the register -which must never be blank.
- Failure to comply will result in criminal liability for the company and any officer in default.
The good news is that LYCSS can help you comply with the new rules.
We use the ICSA Blueprint software to maintain all of our client records
and this is able to run the new registers.
Not a client yet – call us on 01732 366561 to find out more.