Tag Archives: Persons Of Significant Control

New Legislation Affecting All UK Private Companies & LLPs – Effective 6 April 2016

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Companies have always had to maintain statutory Registers of Directors and Registers of Shareholders, but now there is a new register that has to be created and maintained for every UK private company and LLP – and in some cases it will be lot more difficult to identify who should be included on the new register.

A new “Register of People with Significant Control” (or PSC for short) has to be created and maintained and the information from the register delivered to Companies House annually. The information available to the public is also more detailed than previously required for shareholders – eg Age, Nationality, Service address, region in the UK they usually live.

For most single companies owned by individuals the people to include on the register will be readily identifiable.  If you own more than 25% of the voting shares of the company your details will need to be included.

However there are many cases where identification of the PSC may be more difficult, including

  • Companies within groups
  • Shares held by Nominees on behalf of others
  • Companies owned by overseas companies
  • Shares held by Trusts
  • Shareholder agreement provisions can change who needs to be included
  • Joint shareholdings or where shareholders have a joint arrangement between themselves
  • Consideration of impact of unexercised share options
  • If an individual has “significant influence” – even if they own no shares at all

For example if a UK company is owned by an overseas company, the UK company directors now have a legal obligation to take reasonable steps to identify who controls the overseas parent.  This includes serving notices on anybody they believe may know who controls the overseas parent and, in extreme cases of no response, potentially the directors can impose restrictions on the shares – for example cease paying dividends on those shares.  It’s a criminal offence not to respond to notices issued within 1 month or not to confirm your details, if you are a PSC.

The PSC register is one of a number of changes to the Companies Act 2006 brought about by the Small Business, Enterprise and Employment Act 2015.  The aim of the Act is to create greater transparency in the ownership and control of UK companies to help in the fight against money laundering whilst increasing trust in UK companies.

Companies without any PSC

The PSC requirements apply whether your company has any PSC or not.  If the company has taken all reasonable steps and is confident that there are no individuals or legal entities which meet any of the relevant conditions in relation to your company, the company must enter that fact on the PSC register.  The register should never remain blank.

Changes to the Annual Return from 6 April 2016

You may or may not be aware of the changes to the filing of Annual Returns at Companies House going forward.

From 30 June 2016 the Annual Return is to be replaced by a Confirmation Statement which will detail similar information as the Annual Return.

UK companies and limited liability partnerships will also need to provide the information from their new PSC register to be filed with the central public register at Companies House from 30 June 2016 as part of the annual Confirmation Statement (which is replacing the Annual Return).

For more information on the PSC guidelines and requirements, please contact Andrew Cowking at andrew.cowking@pmm.co.uk or Anne Ramsden at anne.ramsden@pmm.co.uk or call 01254 679131.

UK Company Ownership Register Postponed

shutterstock_178654685Back in April, we blogged about legislation being introduced in January 2016 that will require public disclosure of major interests in UK companies. This has now been postponed until April 2016, and additionally, companies will have until June 2016 to file the information with Companies House. This information will then have to be updated at least once every 12 months.

The information that will need to be submitted in compliance with The Small Business, Enterprise and Employment Act 2015 (the Enterprise Act) will be available to the public and must include details of anyone with an interest of 25% or more in the business.

The Government’s target of clamping down on money laundering and tax evasion may have significant commercial issues for many businesses in the UK. Companies may be reluctant to disclose this seemingly sensitive information. It is not uncommon to seek to keep an investment confidential, especially in an early stage business which may shake up a market or upset existing customers or suppliers.

Come June 2016, anyone who doesn’t take reasonable steps to comply with the new rules or anyone who hasn’t filed the information with Companies House may be convicted of a criminal offence, with the penalties including a possible prison sentence and disqualification from being a director. Persons of Significant Control will also be responsible for disclosing any interests or shares they may have in a directly or indirectly competing company to their current employer or fellow directors.

If you have business interests which could be affected by the impending Enterprise Act, please contact David Gorton (Senior Partner & Head of Corporate Services), who specialises in business structuring, at david.gorton@pmm.co.uk or call 01254 679131.