Introducing the Register of People with Significant Control

The Register of People with Significant control was introduced as part of the Small Business and Employment Act, 2015, after concerns were raised about corporate transparency at the 2013 G8 Summit. Although aimed mainly at large organisations, all private and public companies in the UK (apart from those publicly traded), need to keep and maintain a PSC Register under the new rules. Even micro companies with a sole director and no employees are not exempt.

Who are People with Significant Control (PSCs)?

There are five main criteria when identifying people with significant control:

• Owning more than 25% of the company’s shareholding
• Holding over 25% of the company’s voting rights Exercising or holding the right to appoint/remove a majority of the company’s board of directors
• Exercising or having the right to exercise ‘significant influence or control’ over the company
• Exercising, or having the right to exercise, ‘significant influence or control’ over a trust or firm (non-legal entity), whose trustees or members fulfil any of the conditions above

Relevant Legal Entities (RLEs)

Provision has been made to include ‘relevant legal entities’ within the PSC Register. Legal entities that have significant control over another company - as part of a large conglomerate, for example – will need to be identified and added to the register, as will certain other companies with their own existing disclosure requirements.

What information is included in the register?

The register is available for public view, and can be accessed online through the Companies House website. It may be kept at the company’s registered address, but must also be filed at Companies House.

• Personal/company detail
  For individuals, this would include their name, date of birth, service address, residential address (not included in the public register), and nationality. PSCs can apply to keep more of their personal information confidential if they wish. Information on Relevant Legal Entities will include the company name, registered office, company number, and type of legal entity
• Which of the conditions for entry on the register are met
  As an example, when considering a shareholding, a PSC must disclose which broad percentage band they fall in: 25% - 50% shareholding, for instance
• Status of identifying PSCs/RLE
  This details the company’s efforts to identify who should be on the register, and is useful if the investigations are not straightforward.

What does the introduction of the register mean for company directors?

Non-compliance with these requirements is a criminal offence. A company must take reasonable steps to identify people or legal entities with significant control by sending out notices. Directors can also send notices to anyone they believe is aware of a PSC or RLE.

From 30th June 2016 a Confirmation Statement should be sent to Companies House each year, replacing the Annual Return. New companies formed from 30th June 2016 onwards must send a statement of initial significant control.

Begbies Traynor can assist in setting up your PSC Register, and make sure that you comply with all statutory requirements.