From 6th April 2016, companies will be required to hold, and keep available for inspection, a register of people with significant control over the company (PSC register) as a result of the Small Business, Enterprise and Employment Bill. The draft Register of People with Significant Control Regulations 2016 were laid before Parliament for approval on 25 January 2016.

Key items from the draft regulations are currently as follows:

  • The requirement will apply to UK companies and LLPs only, and not to foreign entities operating in the UK.
  • A "person with significant control" (PSC) is an individual who meets one or more of the following conditions:
    • Direct or indirect ownership of more than 25% of a company's shares.
    • Direct or indirect control of more than 25% of a company’s voting rights.
    • Direct or indirect right to appoint or remove a majority of the board of company directors.
    • Exercises or has the right to exercise significant influence or control over a company.
    • Exercises or has the right to exercise significant influence or control over activities of a trust or firm which itself meets one or more of the first four conditions.
  • Companies will be required to identify people they know or suspect of having significant control, including by giving notice to PSCs and others to obtain information.
  • The required details of a registrable person will be the individual's:
    • name;
    • service address;
    • nationality;
    • date of birth;
    • usual residential address;
    • date on which the individual became a registrable person with regard to the company in question; and
    • nature of his or her control over that company (via 3 broad bands of shareholdings; 25-50%; 50.1%-74.9% and 75%+)

These details must be maintained as the information changes.

  • A statement of initial significant control regarding the company’s PSCs is required to Companies House on incorporation which would then be updated every 12 months via a confirmation statement.
  • In order to compile the information for the register, companies must take reasonable steps to identify and notify registrable persons. Should a registrable person or legal entity fail to respond to companies’ enquiries, a company can disenfranchise and impose restrictions on any shares held by them.
  • The PSC register should be maintained at its registered office or other inspection address and be available for public inspection.
  • Information will be publicly accessible on the company register at Companies House with a similar protection regime as is currently provided e.g. PSCs' residential addresses will be protected from public disclosure on the public and company register, and the day of the date of birth will not be disclosed on the public register at Companies House, unless the company wishes to hold its PSC register at Companies House.

Further details:

Legal entities with significant control

Where legal entities have control over a company, the details should also be included on the PSC register. A relevant legal entity would be defined as being an entity which would have been classed as a person with significant control, if it were an individual, and an entity which is subject to its own disclosure requirements (i.e. it has to maintain its own PSC Register or is exempt because, for example, it is a DTR 5 issuer or EEA equivalent).

Fees

The fee for any single request for a copy of a company's PSC register or any part of it, regardless of how many parts are required to be copied will be £12.

Companies not required to keep a PSC Register.

These will be companies who have voting shares admitted to trading on certain markets in Israel, Japan, Switzerland and the US and those companies with voting shares admitted to trading on a regulated market in an EEA state as these companies are already subject to the disclosure requirements of DTR 5 and already make major shareholder information public.

Next steps

The companies subject to the new requirements will be required to maintain the PSC Register from April 2016 and from June 2016 the registers should be filed at Companies House.