Summary

A new Part 21A of the Companies Act 2006 is came into force on 6 April 2016. It requires all UK companies and LLPs to keep a register of people with significant control in their company. It is intended to lead to the identification of all individuals who are the ultimate beneficial owners of companies; the details of their holdings will be made public.

From 30 June 2016, the information will need to be filed at Companies House when a company makes its annual Confirmation Statement (the replacement for the Annual Return).

A person with significant control (“PSC”)

A PSC is an individual meeting one or more of the following five conditions:

  • ownership of more than 25% of shares in the company;
  • ownership of more than 25% of voting rights in the company;
  • holds the right to appoint or remove the majority of the board of directors of the company;
  • holds the right to exercise significant influence or control over the company; and
  • holds the right to exercise significant influence or control over a trust or firm (which trust or firm would be a PSC if it were an individual).

If a company is owned and controlled by a legal entity, its details must be entered on the register only if it is both a relevant legal entity (i.e. it keeps its own PSC register) and is a registrable legal entity (i.e. it is the first relevant legal entity in the company’s chain of ownership) (an “RLE”).

Obtaining information for the register

Companies are required to take reasonable steps to establish whether they have any PSCs and to obtain the information required for entry on the register.

Companies must serve notice on any individual or RLE that may be registrable and require that the individual or RLE provide the necessary information for entry on the company’s PSC register. Failure by a company to take reasonable steps, and refusal by an individual or RLE to provide information for entry on the register are criminal offences.

Keeping the register

The register must contain the following information in respect of each PSC:

  • full name;
  • service address;
  • country of usual residence;
  • nationality;
  • date of birth;
  • residential address;
  • date on which he/she became a PSC;
  • the nature of his/her control over the company.

If a company does not have any PSCs (having taken reasonable steps to confirm that is the case), it must enter that fact on the PSC register.

The PSC register must be available for public inspection and kept up to date as information changes.

Filing PSC information at Companies House

For companies incorporated before 30 June 2016, when completing their first Confirmation Statement, they will need to enter the PSC information from their register and file the Confirmation Statement at Companies House.

For companies incorporated after 30 June 2016, they will need to complete a statement of initial control to confirm the company’s PSC information, and submit that statement to Companies House as part of the incorporation process.

For all companies, the PSC information must be reviewed and submitted to Companies House on an annual basis as part of the Confirmation Statement.

Can information be withheld from the register?

A PSC can apply to Companies House for some or all of their information on the PSC register to be withheld in limited and exceptional circumstances only.

Practicalities

Generally, if a company has a clear chain of ownership, the obligation to keep and maintain a PSC register should not be particularly onerous. In particular, if a company’s PSC is a RLE, the company will not have to look any further up its chain of ownership, and the RLE will have its own obligation to keep a PSC register.

For companies with more complex structures or if the chain of ownership is unclear, the obligation may prove a little more difficult and thought will need to be given as to who the correct PSCs are.

Why is this relevant to charities?

Any charities that are established as companies will need to comply with the requirement. The requirement to keep a PSC register seems not to apply to charitable incorporated organisations, Royal Charter bodies, charitable corporations established by statute, community benefit societies, unincorporated associations or trusts.

However, if a charitable body has a wholly owned trading subsidiary company, or an interest in a company, then the subsidiary or company should keep its own PSC register.