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The PSC Register – a new requirement

The Small Business, Enterprise and Employment Act 2015 has introduced several new measures and the requirement for the PSC Register is one of them.

What is the PSC Register?

PSC stands for People with Significant Control, these are people who will have control over a relevant entity.

The Register will identify and record the people who own or control their company and the information will be publicly available on a central registry held at Companies House.

The aim of the Register is to help increase transparency as to who owns and controls companies.

Who should have a PSC Register?

Companies, Limited Liability Partnerships and Societas Europaea will have to comply with the new regime. This article will focus on companies.

So what are the requirements?

As of 06 April 2016 companies are required to maintain their own PSC register i.e. a new addition to the registers which the company should already have and which are kept at the registered office.

The company will first need to identify who the people with significant control are and confirm their information.

Important point to note – If someone refuses to provide and/or confirm the information requested the company may be able to place restrictions on shares or voting rights where someone is deliberately withholding information.  It may also be considered a criminal offence.

From 30 June 2016 companies will also have to provide this information to Companies House when they deliver their confirmation statement i.e. the old annual return.

They will also need to make sure the information on the register is updated when any changes are made. Changes to the Companies House register will be dealt with annually in the confirmation statement.

People with Significant Control (PSC)

This is an individual who falls into one of the following five categories:

  1. a) Direct or indirect ownership of more than 25% of the shares in the company;
  2. b) Direct or indirect control of more than 25% of the voting rights in the company;
  3. c) A direct or indirect right to appoint or remove a majority of the directors of the company;
  4. d) The actual exercise or right to exercise significant influence or control over the company; or
  5. e) The actual exercise or right to exercise significant influence or control over the activities of a trust or firm which itself meets one of or more of the first four categories.

Items a – c can likely be sourced in the Register of Members, articles of association of the company or indeed other key documents such as shareholder agreements. In regard to items d – e Companies House has published statutory guidance which provides examples of how to identify such individuals.

What is recorded on the Register?

The Register will list the PSC’s and/or other registrable relevant legal entities, which are also known as RLE’s.

Not all PSC’s or RLE’s have to be registered particularly where there is indirect ownership of the company in question.

The details that have to be recorded are:

PSC’s – name, date of birth, nationality, country or state, where usually resident, service address, usual residential address (which won’t be public), date became a PSC, why they are a PSC and if there are any restrictions in place.

RLE’s – name, legal form, governing law, registered/principle office, register of companies in which it is entered, registration number, date became an RLE and how they have significant control.

As well as the category of control the Register will need to have an indication as to the percentage of control for example it will need to state the individual owns more than 25% or owns more than 50% and up to 75% etc.

Where a company has a problem in ascertaining and confirming the required information, it must state this in the Register. The Register can never be blank and the Companies House guidance provides a full list of statements explaining this situation.

The format the register takes is not specified. It only requires the specific information to be included.

Summary of other matters

A company can choose to just keep the PSC register with Companies House and not have an internal register as well. If it chooses this route, a specific notice needs to be sent to Companies House. One thing to remember is that the Date of Birth of the PSC will become public knowledge unless the individual applies for the information to be suppressed.

Forms and filing procedures will be expected to be published in the coming weeks by Companies House so please watch this space.

A link to the Companies House guidance is:

https://www.gov.uk/government/publications/guidance-to-the-people-with-significant-control-requirements-for-companies-and-limited-liability-partnerships