On 26 June 2017, new requirements came into force relating to the register of people with significant control (the “PSC Register”). In this bulletin, we describe those changes and provide some general reminders about keeping company registers.
The term “relevant entity” is used in this briefing to refer to any legal entity that is required to keep a PSC Register.
PSC REGISTER: New entities are required to report, and everyone must report faster.
The key changes to the PSC Regime are as follows:
1. Changes to the PSC Register must be recorded within 14 days and notified to Companies House within a further 14 days.
The previous requirement to update a PSC Register as soon as reasonably practicable following a change to information held about a person with significant control (a “PSC”) or a relevant legal entity (an “RLE”) has been supplemented with a requirement to complete such an update within 14 days. Once the PSC Register has been updated, the change made must then be notified to Companies House within a further 14 days. New forms PSC01 – PSC09 have been created by Companies House for use by companies making such filings (together with equivalent forms for other relevant entities). Any notices required to be sent to a PSC or RLE after a relevant entity becomes aware of a change to information held on the PSC Register must also be sent within 14 days of the relevant entity becoming aware of the change. Further obligations to update the PSC Register and notify Companies House may also be triggered in the one month period allowed for the PSC or RLE to respond to such a notice. The contents of the Confirmation Statement (which replaced the Annual Return as from June 2016) are also changed as from 26 June 2017 and PSC information is no longer updated through an annex to the Confirmation Statement. PSC information will need to be checked when the Confirmation Statement is filed however in order for confirmation to be given that the relevant information is up to date; if PSC information held by Companies House is not up to date at that time, an appropriate PSC form (PSC01 – PSC09) should also be filed with the Confirmation Statement.
Companies and LLPs that have filed a Confirmation Statement during 2016/17 (but prior to 26 June 2017) and which are aware that PSC information has changed since that filing are required to update their PSC information held at Companies House by filing the relevant PSC form. These ‘catch-up’ notifications were required to be filed by 10 July 2017 (i.e. within 14 days of 26 June 2017).
2. Unregistered companies and companies listed on the AIM and NEX markets must now have a PSC Register.
Unregistered companies have been brought within the PSC Regime for the first time, as well as companies with shares traded on AIM or the NEX Exchange Growth Market (who previously benefitted from an exemption). The requirement to keep a PSC Register came into force for these companies on 24 July 2017. A PSC Register is required to be established by these companies by 7 August 2017 (i.e. within 14 days from 24 July 2017) and filed with Companies House within a further 14 days from the date it is established. Companies traded on AIM and NEX are already required to keep detailed information about their shareholders in accordance with DTR5 and should have much of the information needed to identify their PSCs or begin a process of enquiries to confirm information about PSCs. However, where there are enquiries that take some time or where PSCs are not quickly forthcoming to confirm their personal details, it is to be remembered that the PSC Register should never be empty and there are prescribed statements to be entered on the register where investigations are on-going.
3. Scottish LPs and Scottish partnerships need not keep a PSC Register but must report PSC information to Companies House.
Scottish partnerships and certain Scottish limited partnerships (“LPs”) may find it useful to establish a PSC Register. Although they are not strictly required to keep and maintain a PSC Register, these entities are now required to file equivalent PSC information with Companies House and to meet the 14 day reporting requirements. These new notification requirements apply to Scottish partnerships and Scottish LPs from 24 July 2017. For a Scottish LP to be caught by these new requirements, all its general partners must be corporate bodies.
Further information on the PSC Regime
The rules governing identification of PSCs are not covered in this bulletin. You may wish to refer to our bulletin from Summer 2016 for an initial overview of key details on keeping the PSC Register (bearing in mind the changes outlined above).
Government guidance for relevant entities and PSCs is available at https://www.gov.uk/government/publications/guidance-to-thepeople-with-significant-control-requirements-for-companies-andlimited-liability-partnerships
We would also be pleased to assist with specific advice on identifying PSCs.
Why has the reporting period changed for the PSC Register?
The obligation to keep a PSC Register came into force for UK companies and LLPs (unless exempt) in April 2016. At that time, the PSC reporting regime was the first set of reporting requirements of its kind and aimed to cause disclosure of the ultimate beneficial owners of legal entities. In the 4th Anti-Money Laundering Directive, the EU has (among other measures) brought into effect similar reporting requirements, which had to be implemented by EU Member States by 26 June 2017. The EU measures go further than the UK regime – among other things, applying to a wider group of companies and other entities, and requiring publicly available information to be “current”. Changes therefore had to be made to the existing UK law.
KEEPING REGISTERS: A general recap
As a general rule, all companies are required to keep a number of registers and to maintain such registers as and when the recorded information changes. In addition, filings must be made with Companies House when information on a register changes (and following other specified events). The register of members has particular importance under English law as it is the definitive document in evidencing ownership of shares. A transfer of shares is legally completed (and not before) when the name of the new owner is entered into the register of members. The other registers that must be kept and maintained are: – Register of directors
– Register of directors’ usual residential addresses
– PSC Register (see above)
– Register of secretaries (if any)
– Register of charges (if any)
– Register of debentures (if any in issue)
Many companies also keep other registers, such as a register of applications (for shares), register of allotments and a register of transfers.
Registers must be available for inspection at the registered office or an alternative designated address. To view or take a copy of the register of members, a non-member must make a written request and have a ‘proper purpose’ for seeing the register. Charges cannot be made for requests to view a register, but prescribed charges may be levied for taking copies of certain registers and other company records.
CENTRAL REGISTER: A new way to keep registers
Since 30 June 2016, companies registered in the UK have the option to keep their registers through the ‘central register’. Broadly, this means that the registers are kept electronically at Companies House and no further physical copy of the register needs to be maintained. (The pre-existing physical version of the register will need to be kept available for inspection for a period.) When a change to the recorded information occurs, a filing is made with Companies House in the usual way which both (i) satisfies the usual filing requirement(s) and (ii) causes an update to the relevant register. If a company wishes to keep its registers using the central register, it must elect to do so. Consent of the members of the company and/or its PSCs will be needed to keep the register of members and/or PSC Register (as applicable) centrally. A potentially significant point for directors and PSCs is that, where registers are held on the central register Companies House will display the full date of birth of a director or PSC (rather than just the date and month of birth).