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Alert: Register of persons with significant control

By: Steven Scarlett Date: 23 March 2016
Category: Alert

New rules applicable from 6 April 2016 require all non-listed UK companies and LLPs to create a ‘PSC Register’ of the people who have significant influence or control over them. These registers will be open to public inspection and details will need to be filed at Companies House from 30 June 2016.

Breach of these provisions by the officers of the company will be a criminal offence with sanctions of fines or imprisonment.

Persons with significant control
The new rules define the conditions by which a person will be deemed to have significant control. This includes persons having control of more than 25% of the company. Where two or more persons collectively have the relevant interest, they will all be caught in certain circumstances. In the case of a Trust being involved in the chain of ownership, the trustee will normally be regarded as the person with significant control, but it is possible that the beneficiaries may be considered to be significant controllers in certain circumstances.

One fairly broad and subjective condition is that the person has the right to exercise, or actually exercises, ‘significant influence or control over the company’.

We recommend seeking guidance where the position is not straightforward.

Obligations on companies
Companies will have to look through however many layers of ownership there are to identify relevant persons who ultimately have significant control of the company. The requirement is to ‘take reasonable steps to identify’ every person who has, directly or indirectly, significant control over the company and the company must keep a register of certain of the relevant people.

In the case of complex group structure, it may be necessary to look at the detailed guidance to establish the relevant people (which in some cases may include companies).

The company must send notice to anyone whom it knows or has reasonable cause to believe to be a registrable person requiring that person to confirm the position. Companies could, therefore, be expected to give notice to all shareholders holding more than 25% of the shares. A company may also give notice to a person if it knows or has reasonable cause to believe that the person knows the identity of a significant controller.

From the outset, the company’s PSC register should never be blank; if there are no PSCs or information is still being sought, this fact must be recorded.

Obligations on significant controllers
A significant controller will also be required to notify the company of his interest (or confirm his interest to the company). Breach is an offence and may also result in loss of rights in the company associated with the interest.

Persons receiving notices from the company outlined above are required to respond appropriately and failure to respond appropriately following a bona fide request is an offence.

Public register
The company will be required to file the information on significant controllers with Companies House. In the case of an individual, that individual’s name, month and year of birth, nationality and service address will be publicly available, together with details of the interest concerned.

A company’s PSC register is open to public inspection. There is a regime for suppressing all information relating to PSCs in exceptional circumstances, where there is a serious risk of violence or intimidation.

How we can help
It is the director’s responsibility to identify and record the PSCs. For those clients where we maintain the company’s statutory registers we will liaise with the directors regarding confirmation of the PSCs to create and maintain the PSC Register on their behalf.

If we do not currently maintain your statutory registers, please contact us for help and advice to meet your obligations under these new rules.

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