Got control? Identify yourself!

Since 6 April 2016, most UK limited companies and LLP’s have been required to maintain a Persons of Significant Control (PSC) register, formally identifying any person or entity that can, or does exercise significant control or influence over the company. Please click here to read our article on the initial implementation of these rules.

On 26 June 2017, further requirements will come into force following the implementation of the EU Fourth Money Laundering Directive (4MLD).

Current position

To briefly summarise, under the current rules, most UK limited companies and LLP’s are required to maintain a register of Persons with Significant Control over the company (PSC register). The information contained in that register must be annually supplied to Companies House as part of the Confirmation Statement. There is a requirement to ensure that the PSC register is kept updated, however, there is currently no requirement for any changes to the register to be disclosed to Companies House other than in the next annual Confirmation Statement. There are also no specified time frames within which the register must be updated, provided that the information supplied to Companies House in the Confirmation Statement is correct each year.

The current rules apply to all UK companies, with the exception of companies which are traded on certain markets, because they should already be subject to disclosure requirements, ensuring compliance with 4MLD.

The changes and how they might affect you

Going forward, from 26 June 2017, in order to comply with the new regulations, any changes to the PSC’s of a company must be notified to Companies House within 28 days of the change using new Companies House forms PSC01 to PSC09. The company must also ensure that its PSC register is updated to reflect the changes within 14 days of the change. All changes must be recorded, and these include;

  • Recording a new PSC/Relevant Legal Entity (RLE)
  • Change of details of current PSC/RLE
  • Removal of a PSC/RLE

Many situations can give rise to the need to make amendments to the PSC register, and notify Companies House, for example, if a current shareholder purchases further shares, so that in total they hold 25% or more of the total shareholding of the company, they will need to be added to the register, and the relevant form filed at Companies House. Similarly, if a PSC were to reduce their shareholding, so as to no longer satisfy the requisite 25%, then the register should be updated accordingly and the relevant form filed.

The exemptions on which bodies need to maintain a PSC register have also been narrowed. Companies which are listed on AIM, or on a market in Switzerland, the USA, Israel or Japan will no longer be exempt, and will need to ensure that they maintain a PSC register and comply with the regulations. Companies listed on a regulated market in the UK will continue to be exempt.

From 24 July 2017, Scottish Limited Partnerships and Scottish Partnerships where all partners are corporate bodies now need to maintain a PSC register and supply information to Companies House.

Failure to comply with the regulations is a criminal offence, punishable by up to two years imprisonment and/or a fine. We strongly recommend that you seek advice on preparing and maintaining your register, and ensuring that the correct forms are properly filed upon any changes which necessitate this. Please contact us if you think you may need further advice on any PSC matters.

 


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