Date of publication: April 2016
Since April 2016, UK companies and LLP’s must keep a register of those who have significant control over the business.
The purpose of the PSC Register is to help build a picture of the company’s ownership, control and structure with the aim of increasing transparency and to aid in combating illicit activities such as tax evasion, money laundering and terrorist financing.
The register will be a public record and available for inspection upon demand in the same manner that a company’s statutory registers are held at the company’s registered office. There will be an ongoing duty imposed on the companies to file updated details of any changes in the beneficial ownership of the entity every 12 months and it is intended that this register will ultimately be a freely downloadable document held at Companies House.
All UK companies and LLPs will need to hold a PSC Register save for those already required to make specific public disclosures such as listed companies or those regulated by the FCA.
There are five conditions that constitute significant control as follows:
direct or indirect ownership of more than 25% of a company’s
direct or indirect control of more than 25% of a company’s voting rights;
direct or indirect right to appoint or remove a majority of the board of company directors;
exercise or have a right to exercise significant influence or control over a company; and/or
exercise or have a 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.
Group structures involving ownership by a non-UK legal entity (e.g. where there is a UK subsidiary of an overseas parent company) are treated differently from wholly UK based structures.
In this scenario, the overseas vehicle is not itself considered to be registrable and instead the individuals with majority control (i.e. greater than 50% in any of the tests detailed in section 3) of the top level of the overseas corporate structure will be recorded as the company PSCs.
Where trusts are involved then the company must consider which individuals or legal entities control the activities of that trust or firm. In most instances this will be all of the trustees, but may also be the trust settlor or beneficiaries depending upon the terms of the trust.
A company’s directors must take all reasonable steps to identify and give notice to all registrable persons / legal entities who should be listed on the PSC Register.
Failure to comply is a criminal offence punishable with fines and up to two years imprisonment.
If the PSC is an individual, information such as their name, address, date of birth and nationality will need to be disclosed. If a PSC is a legal entity, then its name and address must be disclosed.
If the company does not have any or cannot identify any PSCs, then the directors must note this in the PSC Register using certain prescribed wording depending upon the specific situation.
Every UK company and LLP must now hold a PSC Register. If this affects you and you do not yet have one in place or would like further information then please contact firstname.lastname@example.org
Disclaimer: This note does not contain a full statement of the law and it does not constitute legal advice. Please seek legal advice if you have any questions about the information set out above.
Copyright © 2013 - Oury Clark.