Companies and LLPs incorporated in England and Wales must keep a register of those who have significant control over their business.
The purpose of the PSC regime is to help build a picture of the company or LLP’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.
In addition to keeping its own PSC register, the company or LLP must submit details of its PSCs to Companies House and file details of any changes to its PSCs when they occur.
All companies and LLPs incorporated in England and Wales need to hold and maintain a PSC Register and make related filings to Companies House.
There are five conditions that constitute significant control for companies as follows:
If an individual person is identified as having control, their details will need to be recorded on the PSC register.
A party having control will be classed as being a relevant legal entity or ‘RLE’ and recordable on the PSC register as such if:
For RLEs only, we are then not required to look any higher at the chain of beneficial owners of the RLE to identify any individuals who might be indirect PSCs, because we can look at either the Companies House record or relevant exchange/ specified market listing for that RLE to trace its beneficial ownership control.
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 (subject to those companies listed on certain regulated or specified markets as set out above) and instead we would need to continue looking up the chain of beneficial ownership until we identify any individual persons or RLEs that have control.
Where trusts are involved then you 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 or the members of an LLP must take all reasonable steps to identify and give notice to all registrable persons / RLEs 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, month and year of birth and nationality will need to be disclosed. If it is an RLE, information such as its name, address and registration number must be disclosed.
The UK government has provided a number of prescribed statements for the PSC register to describe the nature of control (including if there are no PSCs or RLEs) these must be used when completing the PSC register.
You should also ensure you check the changes to your PSC register any time there is a change in shareholding.
Every company and LLP incorporated in England and Wales 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.
Copyright © 2013 - Oury Clark.