New PSC register requirements take effect
Newsletter issue - June 2016.
From 6 April 2016, all unlisted UK companies, limited liability partnerships (LLPs), or societas europaea (SEs) are required to maintain a register of the people who have significant control over them. This new register of 'people with significant control' is known as the PSC register, and its purpose is to identify individuals who ultimately own or control more than 25% of a company's shares (or more than 25% of an LLP's assets), more than 25% of the company/LLP's voting rights, or who otherwise exercise control over the company or LLP and its management. The introduction of the register is a central part of the UK Government's G8 commitment to greater corporate transparency.The requirements to keep a PSC register are set out in Part 21A of the Companies Act 2006, (as inserted by the Small Business Enterprise and Employment Act 2015, and supported by secondary legislation where necessary).
From 30 June 2016 onwards companies, SEs and LLPs will have to deliver PSC information annually to the central public register at Companies House when making a Confirmation Statement - the Confirmation Statement replaces the annual return from June 2016. In addition, from 30 June 2016 onwards, those seeking to incorporate a new company, SE or LLP will have to send a statement of initial significant control to Companies House, alongside the other documents required for an application to incorporate.
Broadly, a PSC is an individual who meets one or more of the following conditions:
- directly or indirectly holds more than 25% of the shares;
- directly or indirectly holds more than 25% of the voting rights;
- directly or indirectly holds the right to appoint or remove a majority of directors;
- otherwise has the right to exercise, or actually exercises, significant influence or control; or
- has the right to exercise, or actually exercises, significant influence or control over the activities of a trust or firm which is not a legal entity, but would itself satisfy any of the first four conditions if it were an individual.
Given that the individual or individuals who control a company are often different from those listed on the register of members, in many cases the PSC register could look quite different from the shareholder/membership register.
The PSC register is available for public inspection and, from 30 June 2016, the information will be searchable online via UK Companies House.
Comprehensive coverage of the new requirements can be found in the Department for Business Innovation & Skills (BIS) guidance entitled Register of People with Significant Control Guidance for Companies, Societates Europaeae and Limited Liability Partnerships.