At the last minute in advance of the EU deadline, the Government has finally issued the regulations (The Information about People with Significant Control (Amendment) Regulations 2017 & The Scottish Partnerships (Register of People with Significant Control) Regulations 2017) to expand and amend the UK’s “persons with significant control" (PSC) rules on transparency of corporate ownership that we have been expecting since Companies House press release of 19 April.

There are two significant dates for implementation.

Monday 26 June - the clock starts ticking for entities currently subject to the PSC regime

First, from 26 June, companies / LLPs which are already subject to the duty to maintain a PSC register are subject to a new duty to update it within 14 (calendar) days of receiving information about a change and to file that information with the Registrar of Companies within a further 14 days.

Action required:

Any company / LLP that has made any changes to its PSC Register since the date of its last Confirmation Statement must give notice of these changes to the Registrar before the end of the period of 14 days beginning 26 June. New forms PSC01–09 will be used to notify changes.

Additionally, while ostensibly the full extension of the PSC regime to ‘eligible’ Scottish partnerships (see below) comes into effect from 24 July, eligible Scottish partnerships are from 26 June capable of being considered to be registrable relevant legal entities (‘RLEs’) for the purposes of determining the content of a company / LLP’s PSC register.

Action required:

Companies / LLPs which are subject to the duty to maintain a PSC register will need to take action now to comply with the updated regime by taking steps to identify Scottish partnerships which are now RLEs and registering and notifying these details in accordance with the new 14 day time limits. Likewise, those eligible Scottish partnerships which are now RLEs in respect of a company or a LLP must comply with the statutory obligations to reply to requests for information from the company/LLP or notify the company/LLP of their status.

Monday 24 July - previously exempt entities must now comply with the PSC regime

Second, the scope of the PSC regime has been extended with effect from Monday 24 July - the only companies that will now be exempt from the requirements to keep and maintain a PSC Register are those which have voting shares admitted to trading on a regulated market situated in an EEA State or on other specified foreign markets. In effect this means that AIM and NEX companies which were formerly exempt are now brought into the PSC regime. So from 24 July, AIM, NEX and unregistered companies are subject to all of the PSC rules in the same way as other companies.

Action required:

The new entities subject to the PSC regime from 24 July should now prepare to set up and maintain a PSC register and, where necessary, to send out investigation notices to persons whom they believe to be a PSC or to have information about a PSC. Individuals who are likely to be PSCs should prepare to supply their details to each entity in which they are a PSC. Those who are at risk of violence or intimidation if their details are made public should consider making an application to have their name and other personal information protected from public disclosure.

Third, ‘eligibleScottish partnerships are also brought into the PSC fold from 24 July. Action will be required by such partnerships and by those who exercise significant control over such partnerships as outlined below.

An eligible Scottish partnership is (a) a limited partnership registered in Scotland (a ‘Scottish limited partnership’) or (b) a general partnership constituted under the law of Scotland in which each member is either a limited company, or an unlimited company, or a Scottish partnership, each of whose members is a limited company (a ‘Scottish qualifying partnership’).

Key changes for these partnerships are as follows:

  • An application for registration of any new Scottish limited partnership must contain a statement of initial significant control;
  • Any existing Scottish qualifying partnership must deliver registration information consisting of its name, service address, partners’ names and other specified details to the Registrar of Companies within 14 days after 24 July 2017 or if it is not yet in existence (or if it exists but has not yet become a qualifying partnership) within the period of 14 days beginning with the date upon which it becomes a qualifying partnership; there is also an obligation to notify upon the partnership ceasing to be a Scottish qualifying partnership;
  • Unlike companies and LLPs, eligible Scottish partnerships are not required to keep their own PSC Register. However, they are obliged to take steps to identify registrable persons and relevant legal entities in relation to the partnership and notify these details and any changes to the Registrar of Companies on an ongoing basis within 14 days of obtaining the information; likewise, registrable persons/registrable legal entities in respect of the partnership are subject to a duty to notify the partnership of their status and of any updates in the same way as they would be required to do in relation to their significant control of companies. In effect therefore eligible Scottish partnerships must deliver to the Registrar PSC information within the period of 14 days commencing on 24 July whether this is details of the identified and confirmed registrable person/registrable relevant legal entity, or a statement in one of the specified forms (e.g. that it has not yet completed taking reasonable steps to find the PSC).
  • All eligible Scottish partnerships will require to deliver a confirmation statement on an annual basis to the Registrar in the specified terms;
  • Similar provisions to protect those who are at risk of violence or intimidation if their details are made public apply as they do in relation to companies;
  • A PSC of an eligible Scottish partnership is an individual/relevant legal entity who meets one or more of the following conditions:
    • Directly or indirectly holding rights over more than 25 % of the surplus assets on a winding up;
    • Directly or indirectly holding more than 25% of the voting rights;
    • Directly or indirectly holding the right to appoint or remove the majority of those involved in management;
    • Otherwise having the right to exercise, or actually exercising, significant influence or control; or
    • Holding the right to exercise, or actually exercising, significant influence or control over the activities of a trust or firm which is not itself a legal entity, but would itself satisfy any of the first four conditions if it were an individual.

There are detailed provisions providing guidance on the interpretation of each of the tests along the lines of those in place for companies and LLPs under the existing regime..