From 30th June 2016, all UK companies and limited liability partnerships (LLPs) have had to keep a Persons of Significant Control (“PSC”) Register which identifies and records the people who own or control their company and file relevant details with Companies House.
It is to help increase transparency over who owns and controls UK companies and help inform investors and support law enforcement agencies in money laundering investigations.
The legislation sets out five conditions to help identify if a person may have significant control over a company:
These requirements can be met indirectly, for example where a person holds rights through another company or where two or more people have an agreement to exercise their rights or votes collectively and the combined value of their shares or rights exceeds 25%.
In the case of a company owned by another entity (e.g. a parent company), then that legal entity’s relevant registration and details must be put on the register. If it meets any of the conditions 1 - 5 and keeps its own PSC register it is deemed relevant; and if it is the first relevant legal entity in the chain of ownership it is registrable.
Under the Regulations, companies are required to look through the immediate legal owners of their shares and take reasonable steps to identify the people who have significant control of the company whether directly or indirectly. This may be beneficial owners.
A company must contact or notify the persons it knows or believes to be PSCs and confirm the information for the register. It may also approach anyone it believes has knowledge of who the relevant PSCs are.
Failure to comply is a criminal offence and may result in a fine or, in the case of individuals such as directors, a prison sentence of up to two years.
A PSC is required to notify or confirm their interest in a company and provide the necessary details. Failure to comply is also a criminal offence with sanctions of a fine or imprisonment. They may also lose their rights in the company until the information is provided.
In the case of an individual, their name, month and year of birth, nationality and service address will be publically available along with details of their interests. The residential address and full date of birth will be available only to credit referral agencies and certain law enforcement or public authorities.
The PSC register should never be blank and must be filed at Companies House annually, with up to date information.
For more information, the Department of Business Innovation and Skills has issued guidance for Companies and Individuals (see www.gov.uk/government/uploads/system/uploads/attachment_data/file/515720/non-statutory_guidance_4_companies_LLPs_and_SEsv4.pdf).
Also since 30 June, there is no longer an “Annual Return” to be sent in. It has been replaced by a yearly submission in a different format called a Confirmation Statement of which the PSC Register is part (although it contains similar information to the Annual Return).