All UK companies must keep a register of "persons with significant control" ("PSCs") from 6 April this year. For many pension trustee companies, the requirements will be taken care of by the company secretariat for their sponsoring employers' group. Where a trustee is wholly owned by another company, meeting the requirements should be straightforward. The situation may be more complicated for a trustee company with a complex or uncertain ownership structure.
Who is a PSC?
Only an individual (not a legal person, such as a company) can be a PSC. However, the legislation also requires companies which exercise significant control over another company, known as "relevant legal entities" ("RLEs"), to be included on the PSC register. The tests for exercising significant control are the same for PSCs and RLEs:
- directly or indirectly holding more than 25% of the shares;
- directly or indirectly holding more than 25% of the voting rights;
- directly or indirectly holding the right to appoint or remove a majority of directors;
- otherwise having the right to exercise, or actually exercising, significant influence or control; or
- having the right to exercise, or actually exercising, significant influence or control over the activities of a trust or firm which is not a legal entity, but would itself satisfy any of the first four conditions if it were an individual.
Where the corporate trustee is wholly owned by another company
The corporate trustee should register the company which is its immediate owner, as this company will satisfy tests (i) and (ii) above and probably test (iii); it will therefore qualify as a RLE. Under the relevant legislation, only the first RLE in the chain of ownership is registerable, so it is not necessary to register companies further up the chain of ownership.
The PSC register
The PSC register, like the company's register of members, must be kept at the trustee company's registered office (or its Single Alternative Inspection Location). It must be open for inspection within five working days of a request and the trustee company must also provide a copy of the register (or any part of it) within the same period on payment of a £12 fee. However, if the company believes that a request for inspection is not for a proper purpose, it can apply to the court to be allowed to prohibit inspection.
The PSC register for a corporate trustee wholly owned by another company should contain the following information:
- Name of the corporate trustee's owner (its RLE);
- The address of the RLE's registered or principal office;
- The legal form of the entity and the law by which the RLE is governed;
- If applicable, a register in which the RLE appears (including details of the country) and its registration number;
- The date when the RLE became a registerable RLE in relation to the corporate trustee;
- Where tests (i), (ii) and (iii) above are satisfied: the following phrases corresponding to those tests must be used:
The RLE holds, directly or indirectly, 75% or more of the shares in the company
The RLE holds, directly or indirectly, 75% or more of the voting rights in the company
The RLE holds the right, directly or indirectly, to appoint or remove a majority of the board of directors.
- Notably, where an RLE meets one or more of conditions (i), (ii) and (iii) above, the PSC register does not have to state whether it also satisfies condition (iv). Condition (v) will not apply, so need not be considered.
Companies House requirements
From 30 June 2016, a trustee company must provide information on its PSCs and registerable RLEs to Companies House on becoming incorporated and then must update the information as part of its annual Confirmation Statement (the replacement for the Annual Return). The information filed will be available for public inspection on the register at Companies House. From the same date, private companies (which will include almost all trustee companies) may elect to keep the relevant information on the register kept by Companies House known as the "central register", instead of maintaining their own PSC register. A corporate trustee which uses this option must notify Companies House whenever an amendment to its PSC register would have been required, so that the central register can be updated.
Trustee companies with more complex or uncertain ownership situations
Where the ownership structure is more complex or uncertain, the trustee company should take reasonable steps to discover if there are any PSCs or registerable RLEs in relation to the company. Corporate trustees of industry-wide pension schemes may find themselves in this position.
If the trustee company has reason to believe that there is a PSC or registerable RLE in relation to it, it should serve a notice requesting information on anyone it knows, or has reasonable cause to believe knows, the identity of the PSC or RLE, and on anyone who could know someone else who is likely to know. This could include intermediaries or known advisers, such as lawyers, accountants, banks, trust and company service providers or any other contacts such as family members, business partners or known associates.
In addition, where the trustee company knows, or has reasonable cause to believe, that an individual is a PSC, the company must send the individual a notice requiring them to confirm whether or not they are a PSC and to confirm or correct their particulars.
Recipients of notices must reply within one month. In addition, anyone who knows that they are a PSC, or that their status as a PSC or particulars have changed, but who does not receive a notice from the trustee company within a month must notify the trustee company of the relevant particulars. The trustee company must not register the relevant individual as a PSC until the individual has confirmed this information. In contrast, the company need not get confirmation from a registerable RLE, but should register it as soon as the relevant information is known.
A company's PSC register must include the status of its investigations into each PSC or registerable RLE – for instance, that it has no PSCs or relevant RLEs, or that it has identified a PSC but their particulars have not yet been confirmed. There is official wording which must be used in the PSC register according to the stage the company is at in its investigations, and the nature of its PSCs or registerable RLEs once identified. A reference guide can be found in Annex 2 of the Guidance for which has been issued by the Department for Business, Innovation & Skills:
Action points for corporate trustees
- Confirm with the company secretariat for your sponsoring employer's corporate group that it has dealt (or will deal) with the PSC requirements in relation to the corporate trustee.
- If necessary, a corporate trustee with a complex ownership structure should take legal advice on whether any PSCs or RLEs exist in relation to the trustee.