With effect from 6 April 2016 and as part of the UK’s commitment to enhance transparency about company ownership, most UK companies will be required to maintain a register of persons with significant control (PSC). From 30 June 2016, this information will need to be provided to Companies House by filing a ‘confirmation statement’, which will replace the requirement to file an annual return.

Similar regulations will also apply to LLPs. However, this article focuses on UK companies.

Scope of the PSC regime

The provisions seek to minimise duplicative filings where possible. As such, not all companies will be required to maintain a PSC register. For example, companies listed on the Main Market of the London Stock Exchange or on AIM are exempt as the disclosure requirements that apply to such companies is already considered sufficient.

Who is a PSC and can a legal entity be a PSC?

Not least because a breach of the provisions is a criminal offence, companies to which the PSC regime apply should already be taking steps to identify PSCs in preparation for the new regime.

An individual must meet at least one of the following conditions in order to be a PSC in relation to a company.

They must:

  • directly or indirectly hold more than 25% of the shares in the company;
  • directly or indirectly control more than 25% of the voting rights in the company;
  • directly or indirectly be able to control the appointment or removal of a majority of the board of directors of the company;
  • actually exercise, or have the right to exercise, significant influence or control over the company; or
  • actually exercise or have the right to exercise significant influence or control over an arrangement which is not a legal entity (such as a trust) which satisfies one of the conditions stated above in relation to a company.

The regime also provides that where the owner or controller of a company is a legal entity (for example another company or an LLP) as opposed to an individual then that legal entity will need to be put on the company’s PSC register if it is a ‘registerable relevant legal entity’ (RRLE).

In summary, an entity will be an RRLE if (i) it would have met one of the conditions for being a PSC had it been an individual and (ii) provided it is also covered by the PSC regime or otherwise subject to applicable disclosure requirements.

Where this is not the case then further investigations into ownership will be required to ensure compliance with the regime.

What information is required to be included on a company’s PSC register?

For individual PSCs, the following information must be included on the company’s PSC register:

  • Name;
  • Date of birth;
  • Nationality;
  • Country or state or part of the UK where the PSC usually lives;
  • Service address;
  • Usual residential address;
  • Date on which the individual became a PSC (i.e., 6 April 2016 for existing companies compiling their first PSC register);
  • Specific condition(s) met and quantification of interest if relevant; and
  • Any restrictions on disclosing the PSC’s information that are in place.

For RRLEs, the following information must be included:

  • The entity’s name;
  • The entity’s registered or principal office;
  • The entity’s legal form and law by which it is governed;
  • The register that the entity appears in and its registration number;
  • The date on which the entity became an RRLE (i.e., 6 April 2016 for existing companies compiling their first PSC register); and
  • Specific condition(s) met and quantification of interest if relevant.

In any event, a company’s PSC register cannot be empty as it should always include information about its PSCs or RRLEs. Where a company has taken all reasonable steps and is confident that no individuals or legal entities meet any of the conditions then that fact must also be recorded on the company’s PSC register.

The PSC register must always be kept up to date by the company. PSCs themselves also have an obligation to proactively inform the company of their interest or of any changes to their interest.

Accessing a company’s PSC register

A company’s PSC register must be kept available either at the company’s registered office or at another location notified to Companies House. Private companies will, with effect from 30 June 2016, be able to elect to maintain their PSC register at Companies House only (where it will appear on the central public register).

Companies maintaining their own PSC register must make it open for inspection by any person without charge (whilst copies can be requested for a current charge of £12).

Protection Regime

Personal information with respect to PSCs will be available on the public register. However, the regime allows for certain protections. An individual PSC’s usual residential address will not, for example, appear on the public register unless it has been provided as a service address. In addition, individual PSCs who feel that their wider PSC information being available on the public register could lead to a serious risk of violence or intimidation due to the activities of the company can apply to Companies House to stop their PSC information being made public.

Penalties for non-compliance

As mentioned above, there are potential criminal penalties for the company, its officers and the PSC for failing to comply with the PSC regime.