People with significant control!

From 6 April 2016 Companies and limited liability partnerships (LLPs) are required to review their lists of shareholders/members and maintain a register of People with Significant Control (PSC). There are criminal penalties for failure to do so!

Department for Business Minister, Baroness Neville Rolfe said on the announcement of the register:

Companies that disguise who owns or controls them are not playing by the rules and have something to hide. This register, the first of its kind in the world, will help tackle abuse of corporate entities. This is part of our commitment to creating an environment of trust and accountability for business.”People with significant control!

For most companies a PSC will be individuals who:

  • hold more than 25% of the company’s shares;
  • hold more than 25% of the company’s voting rights;
  • have the right to appoint or remove the majority of directors.

If an individual does not meet the above conditions, you need to check if you have anyone who:

  • has the right to, or actually exercises, significant influence or control over the company;
  • has the right to, or actually exercises, significant influence or control over a trust or company that meets one of the above conditions.

Whilst a PSC is an individual, the regulations also provide for a “relevant legal entity” (“RLE”) to be recorded as well. A RLE is relevant if it meets any of the conditions above for individuals, and

  • it is subject to the Financial Conduct Authority’s Disclosure and Transparency Rules;
  • it has voting shares admitted to trading on a regulated market in the UK or European Economic Area (or on certain other specified markets further afield).

From 30 June 2016 the company annual return is being replaced by the Confirmation Statement. As with the current annual return, the confirmation statement will be required to be filed online to confirm that Companies House holds the correct information and provide updates as appropriate.

The confirmation statement will contain the current annual return information but, in addition as part of the first confirmation statement, you must also provide the information contained in your register of PSC.

You can read the additional guidance on the Companies House website or get in touch with Harbour Key to discuss.

Harbour Key Limited

9 May 2016