From 6 April 2016 almost all UK incorporated private companies, LLPs and SEs (Societates Europaeae) will have to keep a register of (a) people and/or (b) relevant entities with significant control over such companies/LLPs/SEs (the “PSC Register”).
The PSC Regime will not apply to UK companies: (a) listed on the LSE, AIM, ISDX Main Board or ISDX Growth Market, (b) with voting shares admitted to trading on a regulated market in an EEA state, (c) with voting shares admitted to trading on certain markets in Israel, Japan, Switzerland or the USA. The PSC regime will not apply to limited partnerships, however, it will apply to private companies, LLPs and SEs that may be owned by a limited partnership.
The test for identifying “significant control” needs to be determined on a case-by-case, factual basis but goes beyond mere ownership of shares or control of voting rights and focuses, in addition, on the ability to appoint or remove a majority of the board of directors and other abilities to exercise significant influence or control without the need for actual ownership. Both individuals and legal entities can qualify as “persons” with significant control.
Companies within the PSC regime will need to file their PSC information at Companies House when making their confirmation statement (which replaces the annual return) from 30 June 2016. The information will be available publically and it will contain personal details, such as name, month and year of birth and nationality for individuals and also specify which of the conditions for being a PSC have been met. Non compliance with PSC Register requirements is a criminal offence and can lead to significant restrictions on owners being able to use the relevant shares. Persons or relevant entities with “significant control” are registrable regardless of nationality or residence.
This means that corporate groups with UK entities in their structures should be working through their structures to identify which entities are required to keep a PSC Register, then carry out an analysis to identify registrable individuals or legal entities for each qualifying entity and obtain the relevant information to complete the PSC registers.
Corporate groups with UK entities in their structures should be working through their structures to identify which entities are required to keep a PSC Register, then carry out an analysis to identify registrable individuals or legal entities for each qualifying entity and obtain the relevant information to complete the PSC registers. Fried Frank can advise you on the new PSC Register requirements and review your group structure and related documents to assess which entities would be “relevant legal entities” and who would be “persons with significant control”. Please contact your usual Fried Frank contact for more information.