It has been known for some time that changes to the register of people with significant control (PSC) regime would take effect on 26 June 2017 (to implement the EU Fourth Money Laundering Directive). Less than satisfactorily, the detail of those changes was largely unknown until 23 June when the government finally published the relevant legislation and guidance.
How has the PSC regime changed?
There are two key changes:
- New filing deadlines – with effect from 26 June 2017, all UK companies and LLPs already required to maintain a PSC register before that date must comply with new filing deadlines under the regime.
- New entities in scope – with effect from 24 July 2017, UK AIM companies, UK NEX-Exchange companies, Scottish limited partnerships, certain other qualifying Scottish partnerships, and UK unregistered companies will all be brought within the PSC regime for the first time. This relatively short grace period gives these entities very little time to prepare for a new disclosure regime.
Previously, PSC disclosures were provided to Companies House once a year as part of the annual confirmation statement. Going forward, Companies House notifications will be made when changes to PSC information occur, ensuring that the information on the public record at Companies House is more up to date. Companies and LLPs must:
- record any change to PSC information in their own PSC register within 14 days of the change
- notify Companies House of the change within a further 14 days. Companies House has published a series of new forms to make this notification.
Scottish limited partnerships and other qualifying Scottish partnerships will need to notify Companies House of any change within 14 days of the change (as they will not be required to keep their own separate PSC register - see further below).
AIM companies and others brought within the regime from 24 July 2017 must file their first notification with Companies House by 7 August 2017.
Scottish limited partnerships and qualifying Scottish partnerships
The PSC regime was introduced in April 2016 as part of the government's drive towards corporate transparency. It is a disclosure regime which aims to make information on the people and entities with significant influence and control over UK corporates publicly available.
From 24 July 2017 the regime will apply to Scottish limited partnerships and to certain other qualifying Scottish general partnerships (primarily where all the members of the partnership are corporates). The regime will apply in much the same way as it does to UK limited companies with a few distinctions. The key differences are set out below.
- Scottish limited partnerships and qualifying Scottish general partnerships do not need to keep their own separate PSC register – the only formal record of their PSC details will be the public register at Companies House.
- PSCs are identified by reference to five key conditions. For companies these conditions include holding more than 25% of the shares or voting rights in a company, having the right to appoint or remove a majority of the board of directors, or otherwise exercising significant influence or control over the company. The five conditions have been modified to fit the structure of a Scottish limited/general partnership and include holding the right to more than 25% of any surplus assets or voting rights, and having the right to appoint or remove a majority of the management. The statutory guidance which applies to determine if a person otherwise exercises significant influence or control has also been adapted.
What action should AIM companies and others new to the regime take?
UK AIM companies and others brought within the PSC regime for the first time from 24 July should:
- familiarise themselves with the comprehensive guidance on the PSC regime published by the government
- review corporate structures to identify potential PSCs
- consider whether statutory notices must be sent to potential PSCs (or others who may have information about PSCs) requesting their details
- create a PSC register* and ensure that by 24 July 2017 it contains details of any PSCs or the appropriate prescribed statement. (There are a number of official statements which must be used where a company has no PSCs or is still carrying out its investigations.)
- by 7 August 2017, send the appropriate form containing PSC information (or appropriate prescribed statement) to Companies House
- put in place ongoing administrative arrangements to maintain the PSC register and make Companies House notifications.
* Scottish limited partnerships and other qualifying Scottish partnerships do not need to maintain their own PSC register.
The BEIS comprehensive guidance on the PSC regime.