Charity trustees and senior executives will recall that our earlier newsletters have explained the new requirement for any charity with a company or limited liability partnership in its organisational structure, to prepare and maintain a People with Significant Control (PSC) Register. Despite lobbying from the sector, there is no exemption for charities.

If you have not done so already you will need to create a PSC Register which sets out the individuals ultimately control a company or LLP, and contains the prescribed details. Unfortunately there is no shorthand way of guiding you through these complex rules. An individual will be a person with significant control where he or she meets any one of the following five tests:

  • He or she holds, directly or indirectly, more than 25% of the shares in a company or LLP;
  • He or she holds, directly or indirectly, more than 25% of the voting rights in the company or LLP;
  • He or she holds the right, directly or indirectly, to appoint ore remove a majority of the board of directors of the company or LLP;
  • He or she has the right to exercise, or actually exercises, significant influence or control over the company or the LLP;
  • He or she has the right to exercise, or actually exercises, significant influence or control over a trust or firm which satisfies any of the first four conditions.

BIS has produced detailed statutory guidance on the meaning of ‘significant influence or control’ There is no alternative but for each charity to sit down with its corporate structure, and work through the rules to establish who might need to be included on the PSC Register. The answer will be different in each charity depending upon the number of company members you have, whether anyone holds appointment rights etc. You should note that even where you have worked through the guidance and are satisfied following reasonable investigations that you do not have to disclose any PSCs, the PSC Register will still be required to contain a negative statement in the prescribed form.