From 6 April this year, the new Part 21A of the Companies Act 2006, has required all UK companies and LLPs to keep a register of people with significant control (a “PSC”) in their company. Part of the present drive towards greater transparency, the new rules are intended to identify individuals who own significant interests in companies, and for such information to be made public.
Who has to keep a register?
Off-shore companies owning UK real estate:
Non-UK companies are exempt. Be warned however, that some overseas companies may be subject to analogous legislation in their own jurisdictions.
Traded UK companies owning UK real estate:
A company traded on the main market or AIM in the UK (or a very limited number of other jurisdictions) need not compile a PSC register. However any UK subsidiary companies or LLPs of such a traded company, perhaps set up expressly for the purpose of holding individual property assets, or as management companies for real estate assets, will be caught by the new rules.
Other UK companies owning UK real estate:
All other UK companies, including the general partners of limited partnerships, should be in the process of compiling the information required for their PSC registers. Even UK corporates owned off-shore are subject to the rules.
Action to take
There are two key requirements:
- to have and maintain a PSC register - from 6 April the obligation has been to have a register, take reasonable steps to identify PSCs and enter appropriate details on the register. The register must never be empty and may, at present, simply state that the company has not yet completed its investigations into PSCs. The PSC register must be continuously updated and is available to public inspection (in a similar way to the company’s other statutory registers;
- to make necessary filings - from 30 June, when an annual Confirmation Statement (the replacement for the Annual Return) is filed at Companies House, this will have to include PSC information so far as the company has it at the time of the filing. At present the information held centrally will only be updated annually although we expect this will change in the future.
A person with significant control
A PSC is an individual meeting one or more of the following five conditions:
- ownership of more than 25% of shares in the company;
- ownership of more than 25% of voting rights in the company;
- holds the right to appoint or remove the majority of the board of directors;
- holds the right to exercise significant influence or control over the company;
- holds the right to exercise significant influence or control over a trust or firm (and that trust or firm would be a PSC if it were an individual)