If you are a company owner, or setting up a new company, you may be subject to new company law legislation that requires companies to have a Register of People with Significant Control (PSC) of that company.
This is a big step forward by the government to ensure further confidence in business following the recent Panama leaks. It also hoped that the new obligations will help to improve transparency of those who own and control UK companies and to tackle money laundering. If you do not comply, you may be committing a criminal offence.
How can you ensure compliance with the new legislative requirements?
1.Identify whether your company needs to keep a PSC Register
All UK private companies, including companies limited by guarantee and Limited Liability Partnerships (LLPs) are required from 30 June 2016 to keep a PSC register unless your company is already subject to disclosing information about ownership under Financial Conduct Authority’s Disclosure and Transparency Rules.
2. Identify the people with significant control
You must take reasonable steps to identify the people with significant control over your company. In order to identify PSC, an individual or a company must meet at least one of the following conditions:
1: They hold more than 25% of the shares in the company
2: They hold more than 25% of the voting rights in the company
3: They hold the right to appoint or remove the majority of the board of directors of the company
4: They have the right to exercise or actually exercise significant control or influence over the company, or
5: They have the right to exercise or actually exercise significant influence or control over any business which is not a legal entity (such as partnership) and that business has significant control (under one of the four conditions above) over your company.
3. Provide this information to Companies House through a Confirmation Statement (formerly known as annual returns)
The next step is to file the information with Companies House. You must start doing this from the 30th June. It can be a little bit tricky, as in most cases, the information will form part of confirmation statements, which replace the annual return from the same date.
Every PSC register will be available to search free of charge from 30 June on the Companies House’s website.
Companies’ filing requirements centre on the anniversary of their incorporation, therefore, it will take up to 12 months for this change to take effect. For instance, a company that files its annual return on 10 May 2016 won’t have to file a confirmation statement (including the PSC register) until 10 May 2017. You could choose to file your confirmations statement early and if you do, your company’s PSC information would become publicly available. Your PSC register needs to be kept up to date
What about new companies?
New companies registering after 30 June 2016 will have to provide their PSC information as part of the incorporation process. This information will be therefore available on the Companies House’s website immediately after registration is complete.
What sort of information do you need to provide if you qualify?
If the person in control is an individual, you’ll need to provide their name, service address, usual country of residence/state of residence, nationality, date of birth, usual residential address, date on which an individual became registrable and the nature of their control.
If the person in control is a company or a firm, you need their corporate/firm name, registered/principal office, legal form and governing law, applicable company register and number, date on which the legal entity became registrable and the nature of their control.
Some information, such as the PSC’s residential address and date of birth will not be available on the public register. In some cases where your company’s PSC is at risk of violence or intimidation, the company or individual in control may apply to have their details protected and kept confidential.
Act now to comply…
The new legislation is not be ignored. There are criminal penalties if you won’t publish the information about PSCs on the Companies House’s website from 30 June 2016. If you have questions about the new PSC requirement, Ask a lawyer.
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