The UK has this now in place and all companies/LLP’s must have a register and declare their Persons of Significant Control (PSC) to Companies House by June 2016 (Companies Act 2006 Part 21A). This is in addition to your normal company secretarial records you are obliged to keep.
A PSC is defined as a person who has one of the following attributes;
- Directly or indirectly holds more than 25% of the shares
- Directly or indirectly holds more than 25% of the voting rights
- Directly or indirectly holds the right to appoint or remove a majority of the directors
- Otherwise has the right to exercise or actually exercises significant influence or control
- Has the right to exercise or actually exercises a significant influence or control over the activities of a trust or a firm which is not a legal entity but would satisfy any of the first four conditions if it were an individual
Note per the last it includes trusts and unregistered firms.
The directors are obliged to establish who or whether anyone qualifies under these conditions and to place them on the register. Private companies and LLP’s may after June elect to keep the register at CH. Note the register is open to the public for inspection. Dates of birth will be suppressed as they are now. Residential information is excluded from public inspection.
The PSC register and the reporting to CH is additional to the Annual Return which it’s understood will be amended. The PSC must be updated continuously, must be current and may not be empty.
There is substantial complexity in the legislation although most SME’s will not be subject to all the complexities. There are however no exceptions to submitting this information.
Most SMEs will just have to declare the current directors. However SMEs will have to apply their minds when:
- its a family company
- there was a “retirement” in a family company
- a person prohibited from being a director trades using their partner as the “front man”
- where ownership is not simply in the hands of the director
If in doubt, a due diligence must be undertaken and this must be able to be shown to have been done. Where doubt exists about a person, the entity must contact the persons whom are thought to maybe have significant control and establish whether this suspicion is confirmed.
The due diligence is a responsibility of the directors representing the entity not that of accountants keeping the records for the company/LLP although they may help and/or process the PSC entry.
Note this legislation change is applicable to all companies even with a single shareholder/director.
If you would like to enquire more about how the PCS register may effect your business you can contact us at firstname.lastname@example.org or call 0333 444 8522.