From June 2016, the PSC information will have to be included on the new annual Confirmation Statement which will replace the current Annual Return that has to be filed at Companies House by all companies and LLPs.
The introduction of the PSC register is one of a number of changes to the Companies Act 2006 brought about by the Small Business, Enterprise and Employment Act 2015. The aim of the Act is to create greater transparency in the ownership and control of UK companies and LLPs, to help fight against money laundering, whilst increasing trust in UK companies.
A PSC can be an individual or a UK registered company. Individuals may meet one of the conditions below through direct or indirect shareholdings. UK companies are registerable on the PSC register if they too meet one of the conditions below and have a direct interest in your company.
If the direct interest lies with a company registered outside of the UK, scrutiny of the full group structure is required until an individual or UK registered company can be identified as the PSC.
As business owners and officers of your companies and LLPs, you are required to do the following from April:
- Identify the people with significant control (PSCs) over the company and confirm key information about them (see below);
- Record the details of the PSC on the company’s own PSC register, which we recommend you keep with the company / LLP’s Statutory Books;
- Provide this information to Companies House as part of the annual Confirmation Statement (formerly the Annual Return); and
- Update the information on the company’s own PSC register when it changes and update the information at Companies House when the Confirmation Statement is made.
There are 5 separate conditions, any of which will result in an individual or legal entity (another UK registered company) needing to be recorded on the PSC register. These are:
- Condition 1: holds, directly or indirectly, more than 25% of the shares in the company.
- Condition 2: holds, directly or indirectly, more than 25% of the voting rights in the company.
- Condition 3: holds the right, directly or indirectly, to appoint or remove a majority of the board of directors of the company.
- Condition 4: has the right, directly or indirectly, to appoint or remove a majority of the board of directors of the company.
- Condition 5: exercises significant influence or control over the trustees of a trust or partners of a firm, where that trust of firm is not a separate legal entity, but where those trustees or partners would otherwise meet the conditions above.
The information that you need to retain for an individual is as follows:
- Service address
- Usual country/state of residence
- Date of birth
- Usual residential address (this will not appear on the public record)
- Date on which the individual was entered onto the register
- Nature of control
The information that you need to retain for an entity is as follows:
- Corporate or firm name
- Registered/principal office
- Legal form and governing law
- Applicable company register and number
- Date on which the legal entity was entered onto the register
- Nature of control
On the face of it, these changes do not appear to be too onerous on companies and are only a variant on what should be already being retained by companies. The legislation is really aimed out creating greater transparency with regards to PSCs, where in the past it has not been that clear. For example, overseas controlling entities.
At the time of writing, there aren’t any templates that have been produced by Companies House which can be used by companies and LLPs to record PSCs; however, if you require any assistance with this and with the new requirements in general, please do not hesitate to contact Andrew Singleton or Kelly Tilsed.