From 6 April 2016, UK companies will be required to maintain a register of “persons with significant control” of the company.

What are the new requirements?

Companies (including corporate trustees of pension schemes) must take reasonable steps to find out if they have any “persons with significant control” (“PSCs”). If they do, they must identify those PSCs and keep a register of them. The register is essentially a docu- ment listing details of the PSCs and stating why they are PSCs. It should be kept with the company’s other registers such as the register of shareholders/ members.

Which companies are subject to the require- ment to maintain a PSC register?

All UK registered companies are subject to the require- ment to maintain a PSC register unless exempt.

Corporate trustees of pension schemes will not be exempt.

Who are PSCs?

PSCs are broadly individuals who:

  1. hold (directly or indirectly) 25% or more of the shares in the company;  or
  2. hold (directly or indirectly) 25% or more of the voting rights in the company;  or
  3. have the right (directly or indirectly) to appoint  or remove directors with a majority of the voting rights on the board;  or
  4. have the right to exercise, or actually exercise, significant influence or control over the company; or
  5. have the right to exercise, or actually exercise, significant influence or control over the activities  of a trust or firm, the trustees or partners of which satisfy one of the other  conditions.

What about group companies?

Where a trustee company is itself a subsidiary in a group of companies, it still needs to maintain a PSC register. In this case, however, it must work up its corporate ownership chain until it identifies either a PSC or a “registrable relevant legal entity” (“RRLE”). An RRLE is a company which satisfies one of condi- tions (a) to (e) above and is:

  • a UK registered company; or
  • an overseas company with shares traded on a regulated market in an EEA state or on certain stock markets in Israel, Japan, Switzerland and the USA (including NASDAQ and NYSE).

If the company identifies an RRLE, the RRLE’s details should be entered in the company’s PSC register and the company need not look further up the corporate ownership chain.

Will a company always have a PSC or RRLE?

It is possible for a company to not have either a PSC or an RRLE in its ownership chain. In such cases, the company must still keep a PSC register which should state that the company does not have a PSC or RRLE. The Government has published wording for companies to use.

What does a company have to do once it has identified a PSC or RRLE?

Once the company has identified someone it thinks is a PSC or RRLE, it must send that person/entity a notice asking the addressee to confirm whether or not they are a PSC/RRLE, and to confirm, correct and complete their details. The Government has produced template notices for companies to use. The company cannot enter details of any individual it thinks or knows is a PSC until the individual has confirmed his or her details. The PSC register must also state which of conditions (a) to (e) above the PSC/RRLE satisfies. The Government has published wording for companies to use.

The company’s PSC register must be available for inspection by any person without charge, and copies must be available for a fee of £12. The information will eventually be available at Companies House as well – from 30 June 2016 companies will need to include the information in their PSC register in their annual return (which will by then have been renamed the “confirmation statement”).

The information in a company’s PSC register must be kept up to date.

When do companies need to take action by?

The requirement to maintain a PSC register applies from 6 April 2016. The Government has published the following wording for companies to put on their PSC register from 6 April 2016 where they are still in the process of identifying their PSCs:

“The company has not yet completed taking reasonable steps to find out if there is anyone who is a registrable person or a registrable relevant legal entity in relation to the company.”

From 30 June 2016, the company will have to include details of any PSCs/RRLEs in its annual return.

What happens if a company does not comply with the new requirements?

Failure to comply with the legislation is a criminal offence on the part of the company and its officers who are in default.

What do trustee companies need to do?

Trustee companies will need to prepare and maintain a PSC register.

Broadly speaking, if the trustee company is wholly owned by another company that is:

  • a UK registered company; or
  • an overseas company with shares traded on a regulated market in an EEA state or on certain stock markets in Israel, Japan, Switzerland and the USA (including NASDAQ and NYSE),

its parent company will be an RRLE. The trustee company need not look further up the corporate ownership chain.

The position in relation to trustee companies with more than one shareholder/member or with an overseas parent company is more complicated and will depend very much on the specific circumstances of the trustee company and the pension scheme. Trustee companies in this position should therefore take advice.