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Small Business, Enterprise and Employment Act update: Countdown to PSC Register

01 Apr 2016

Companies are on a countdown to compliance with new regulations brought in by the Small Business, Enterprise and Employment Act which come into effect from April 2016.

The Annual Return is no longer required and instead unlisted UK companies and LLPs now have to identify those individuals with significant control over them and record these details in a statutory register. The details must be prepared by 6 April 2016 and then filed on the public register with Companies House from June 2016.

People with Significant Control – the PSC Register

Companies are required to complete and maintain a public register setting out those persons with “significant control” over the company. The register should provide personal details of these individuals including their name and address, date of birth, the date on which that person became registerable (or when they obtained significant control); and the nature of their control or interest in the company.

‘People with Significant Control’ are those with more than 25% of a company’s shares, more than 25% of the voting rights or the rights to appoint, remove or control the majority of the board of directors. It also includes those who have the right to exercise “significant influence or control over the company”. Identifying such individuals may prove challenging for companies with complex ownership structures; including those where trusts, partnerships or overseas companies are involved.

The task of identifying which individuals should be disclosed may be difficult and most companies are going to need support to be sure they’ve identified their PSCs and have prepared the register correctly. The PSC register may be quite different from the register of shareholders which companies will be used to disclosing.

The register must be maintained at the company’s registered office and will be available for public inspection and searchable online via Companies House, although certain personal information that must be provided to Companies House will be redacted in the public version of the register, including residential addresses.

Failure to comply with this requirement will be a criminal act and it’s not sufficient for companies to say they are unsure of who has the controlling interest as they must take ‘reasonable steps’ to identify and list them. If a company is unable to identify who has control of, for example, a holding company, this must be detailed in the register.

For further information or if we can help with any of the issues set out above, please contact Jonathan Waters, Corporate Partner at Hay & Kilner on 0191 232 8345 or email: Jonathan.Waters@hay-kilner.co.uk