New obligation to keep a register of people with significant control

From 6 April 2016 UK companies, limited liability partnerships (LLPs) and Societates Europaeae (SE) are legally obliged to keep a register of individuals or legal entities that have control of them i.e. People with Significant Control (PSC).

What does a company need to do?

identify people with significant control, obtain and confirm their information;
record the information in its PSC register;
disclose the information  in its annual confirmation statement to Companies House; and
update the information in its PSC register when it changes and notify the changes to Companies House on the next confirmation statement.

Companies House and the Department for Business, Innovation and Skills (DBIS) are not expecting companies to have complete PSC registers from the outset. Initially, in order to comply with the legislation, the register need only say that the company is collating information (we have prescribed wording if needed).

The PSC register can never be blank. It must record the PSC information or, where this is not applicable or not yet available, the relevant status. There are a number of prescribed statements to record a variety of circumstances and the official wording must be used at all times.

What is a PSC?

A PSC is an individual who meets one or more of the following conditions:

holds more than 25 per cent directly or indirectly of the company’s share capital;
holds more than 25 per cent directly or indirectly of the voting rights in the company;
holds the right to appoint or remove the majority of the board of directors;
has the right to exercise or actually exercises significant influence or control over the company;or
has the right to exercise or actually exercises significant influence or control over a trust or firm, where that trust or firm would satisfy any of the first four conditions if it were an individual.

This is not exhaustive and these conditions may also be met in less usual circumstances. Some information may be obtained from a review of the company’s register of members and articles of association but a company must look beyond these if control or influence is exercised by other means. 

Information for a PSC required to be recorded in the PSC register is as follows:

full name
date of birth
country, state or part of the UK where the PSC usually lives
service address
usual residential address (restricted disclosure applies)
date of becoming a PSC – for existing companies this will be 6 April 2016
which conditions for being a PSC are met and additional details in the prescribed format relating to the extent of control and
whether an application has been made to protect the PSC’s information from public disclosure (i.e. for those at risk of intimidation or violence).

Before any details of a PSC may be entered in the Register, a company must confirm all the details with the PSC. 

What if a company is owned or controlled by another entity?

Different rules apply where a company is owned or controlled by a legal entity (eg a company or LLP). That entity’s details must be put on the PSC Register provided but only if it is both relevant and registrable. We can provide more information on registration if your company is owned or controlled by another entity.

Access to information on the PSC register

Any individual or organisation can request access to a company’s PSC register (in the same way as they can its register of members) provided it is for a proper purpose and all information must be provided except the PSCs residential address (unless it is also the PSC’s service address). There is a legal requirement for the company to respond to requests to view the register within five days. 

The PSC information disclosed on the public record at Companies House will similarly not include a separate residential address nor will it give the complete date of birth.

In exceptional circumstances where there is a risk of serious violence or intimidation it is possible to apply for all information relating to a specific PSC to be suppressed on the public record or for the prevention of his residential address being shared with credit reference agencies.

Companies keeping their own registers on the public record

From 30 June 2016 private companies (and LLPs) will have the option to hold and maintain their registers, including the PSC register, on the public record at Companies House. For the list of requirements for keeping the PSC register on the public record please contact your usual RSM adviser.

What can RSM do to assist you?

Where you maintain your own statutory registers we can advise with regard to the contents of the PSC register and the process for identifying PSCs or registrable RLEs.  

We can create or maintain the PSC register on your behalf together with your other statutory registers on our bespoke database to ensure you are fully compliant with the legislation.

Where we already maintain your statutory registers, the PSC register will be created and maintained as part of the annual company secretarial compliance service.  

Should you wish to transfer your statutory registers on to the public record at Companies House we can provide advice on the implications of doing so and draft documentation to ensure such registers comply with the legal requirements – however please remember that full date of birth details will then be included on the public record. 

We can also assist with drafting documents in connection with information gathering or imposing restrictions on shareholders if they fail to comply with requests for information.

If you would like to discuss any of the points raised, please contact Trish Sankey.