We reported in July that the Small Business, Enterprise and Employment Bill (the Bill) had been introduced into Parliament. This Bill includes measures intended by the Government to improve corporate transparency, increase trust in UK business and simplify company filing requirements.  For details of the background to the Bill and more specifically the corporate aspects covered by the measures planned please see the article in our July newsletter which can be found here

One of the more significant new measures proposed to improve transparency in the ownership and control of companies is for amendments to be made to the Companies Act 2006 to require companies to keep a register of people with significant control (aPSC) over the company (the PSC register).  An individual may be a PSC through ownership of shares or voting rights or the ability to appoint or remove directors.  They may also be a PSC as a result of having some other form of 'significant influence of control' over the company. 

As the Bill requires the Secretary for State to publish statutory guidance about the meaning of 'significant influence or control' which has to be laid before Parliament, the Department for Business, Innovation and Skills (BIS) has now published a Discussion Paper (DP) seeking views on the matter.  The DP seeks views on the structure, format and content of the guidance and asks whether an external Working Group should be set up to prepare the guidance.  It also seeks views as to whether wider, non-statutory guidance is needed and asks what areas this should cover and how best it could be communicated to companies and who should produce it.

The DP also looks at how the nature of control should be recorded on the PSC register and sets out the government's objectives in this area.  These are that information on the PSC register:

  • is clear and concise
  • is relevant, appropriate and proportionate
  • respects confidential information
  • is consistent (across the companies' own registers and across the company and the public PSC register)
  • allows companies to complete their registers and returns to Companies House quickly and easily.

The Bill provides that the Secretary of State may make regulations as to how the scope of control is entered by a company in the PSC register. Although there is no obligation to regulate (the Bill sets out what needs to be included in the PSC register), BIS's view is that there is value in making matters simple and standardised and suggests an approach that breaks down the nature of control into a series of sub elements with a discrete number of options. Three diagrams setting out different options are offered and views sought on this approach or whether a less prescriptive scheme is preferable.

The PSC register will be publicly accessible, so the DP includes proposals for the 'protection regime' which will be available where there are legitimate reasons for individuals wishing to avoid public disclosure of information, in order to protect their own and family members' personal safety and well-being.

The proposals are:

  • automatic protection of all PSC's usual residential addresses from disclosure on the public and company registers
  • the ability for PSCs to apply, if certain criteria are met, for their usual residential addresses not to be disclosed to credit agencies
  • suppression of full date of birth
  • suppression of data of PSC's at serious risk of harm.

The DP also seeks views on which of the required particulars should be suppressed from public and what factors should be taken in to account when deciding whether someone is eligible for protection, who should be able to apply for protection and what evidence should be required, whether blanket applications should be allowed where a PSC is involved with a number of companies, whether protection should be indefinite and when it should be revoked.

BIS also seeks views on whether the current list of public authorities currently able to request access to directors' usual residential addresses under the Companies (Disclosure of Address) Regulations 2009 is the appropriate list in the context of PSC information and whether this should be narrowed for a PSC at serious risk of harm.

Views are also sought on the costs and benefits of the policy changes set out in the DP for PSCs, companies and third parties.

Responses to the DP are required by 9 December. If you would like assistance putting together a written submission, please contact your usual Hogan Lovells contact or one of the listed contacts.

A copy of the DP can be found here.