Definition
The PSC or ‘persons with significant control’ register is a new statutory register which most UK companies and LLPs will be required to keep in order to ensure that the individuals who are its ultimate beneficial owners and controllers are identified and details of their holdings made public.
Rationale
The Government hopes that the introduction of the PSC Register and the other measures relating to transparency contained in the Small Business Enterprise and Employment Act 2015 (“Act”) will help combat tax evasion, money laundering and terrorist financing by allowing a full picture of the structure of businesses to be created.
Implementation
UK companies will be required to maintain a PSC register from April 2016 and as from 30th June 2016 to provide this information annually to the UK Companies House by way of filing.
‘Person with Significant Control’
An individual with significant control will meet at least one of the following five conditions:
- directly or indirectly hold more than 25% of the nominal share capital; or
- directly or indirectly control more than 25% of the votes at general meetings; or
- directly or indirectly be able to control the appointment or removal of a majority of the board; or
- actually exercise, or have the right to exercise, significant influence or control over the company; or
- actually exercise or have the right to exercise significant influence or control over any trust or firm (which is not a legal entity) which has significant control (under one of the four conditions above) over the company.RequirementsUK companies will need to take all necessary steps to create and keep updated a register held at their registered offices containing the following information on persons who exercise significant control over the company: –
- name
- service address
- country or state of usual residence
- nationality- date of birth – usual residential address
- nature of their control over the company –
- date on which they became a registrable person in relation to that company
Access – Costs
A company’s PSC register must be available for inspection by the public subject to certain exclusions and controls. Information can be accessed online, by post, fax, email or in person. Some protected information can be accessed by certain authorities upon request.
PSC information on the public register will be accessible online in machine readable format for free.
Non- Compliance
In order to comply with these new requirements, each company is under the obligation to identify relevant PSCs and to keep up-to-dated information at all times. In this respect, companies can make investigations by notice . Where the company has not sent the necessary notices requesting PSC information, the registrable individuals and relevant legal entities concerned have an obligation proactively to inform the company of their interest (or any changes to it).
There are criminal penalties for companies and their officers and the relevant individuals or legal entities for non-compliance with these duties. Actually, failure to comply with new requirements will be considered a criminal offence.
Observations
This reform constitutes a significant change in terms of transparency of UK company ownership and control. The UK is leading the way internationally and will continue to encourage other countries to follow their example UK and international directors and shareholders of UK companies should be ready to adapt to changes.
