The UK government has published two draft regulations on the proposed register of people with significant control (PSC Register): (i) the draft PSC Regulations; and (ii) the draft PSC Regulations for LLPs.

The PSC Register is part of a package of measures, introduced by the Small Business Enterprise & Employment Act 2015 (the Act), to increase transparency and combat tax evasion, money laundering, and terrorist financing.

It is expected that:

  • From April 2016, most UK companies and LLPs will be required to keep a PSC Register; and
  • From June 2016, they will be required to file their PSC Register information at Companies House.

The proposed regime will not apply to:

  • Foreign companies operating in the UK; or
  • UK companies that:
    • Are subject to chapter 5 of the Disclosure and Transparency Rules; or
    • Have voting shares that are traded on a regulated EEA market, or on one of the specified markets in Israel, Japan, Switzerland or the United States.

The PSC Regulations

The first draft of the PSC Regulations was published by the Department of Business, Innovation and Skills, in a June 2015 Consultation Paper.  The latest PSC Regulations include provisions on the non-disclosure of residential addresses in certain circumstances; and amendments to the Companies (Disclosure of Address) Regulations to align the two regimes.

The LLP PSC Regulations

The LLP PSC Regulations amend the Limited Liability Partnerships (Application of Companies Act 2006) Regulations 2009, which in turn modify provisions of the Companies Act 2006 to require LLPs to keep a PSC register. In the context of an LLP, an individual will be a person with significant control if he:

  • Has a direct or indirect right to more than 25% of the LLP’s surplus assets on a winding up;
  • Has a direct or indirect right to more than 25% of the members’ voting rights;
  • Has a direct or indirect right to appoint or remove a majority of the LLP’s management; or Exercises, or
  • has the right to exercise, a significant influence over the LLP.

Compiling the information and non-compliance

Every relevant company will have a duty to take reasonable steps to find out if it has any registrable persons or legal entities, and to identify them (if it does). Investigations will be by notice, in the form required by the relevant regulations. If a notice recipient fails to respond, the company will be able to disenfranchise that person, or impose restrictions on his shares.

Making the PSC Register available to the public

A relevant company will be required to:

  • Keep its PSC Register at its registered office, and to make it available for inspection in the same way as for its register of members;
  • File the information on its PSC Register at Companies House at least once a year; and
  • Provide copies of the PSC Register to any person, on request.

The Act is available here. There’s a summary of the Act, and the Government’s provisional implementation timetable here. The Governance Institute’s guidance on these issues is available here, here, here and here.