New Corporate Law Requirements

Introduction

The Small Business Enterprise and Employment Act 2015 (“SBEEA 2015”) has introduced a number of measures intended to improve transparency and trust in companies and other similar entities like LLP’s, most notably the requirement for a register of people with significant control (“PSC”) over the legal entity.

The PSC Register is intended to give more accurate, open and current information on who ultimately owns and controls companies and other legal entities and the information will be publically available at Companies House.

Who needs to keep a PSC Register and from when?

From 6th April 2016 most UK companies and LLP’s will be required to keep and maintain a register.  This will need to be kept internally from 6th April 2016 and will need to be filed at Companies House from 30th June 2016 when the entity delivers its confirmation statement (which replaces the annual return).  Companies incorporated after 30th June 2016 will need to send a statement of initial significant control with other applications/incorporation materials.

Where should the PSC Register be kept? 

PSC information may be kept on the central register as maintained at Companies House and in an entity’s own register, most typically maintained at the entity’s registered office.  A company must give notice to the Registrar of the place where its PSC Register is kept available for inspection.

Which persons or entities should be recorded on a PSC Register? 

All individuals that meet at least one of the conditions set out below are deemed to be a PSC.  A company, LLP etc that meets at least one of the conditions set out below is also deemed to be a Relevant Legal Entity (“RLE”) and needs to be included in the Register.

The five conditions are:-

Condition 1: direct or indirect ownership of more than 25% of the shares in the company.

Condition 2: direct or indirect control of more than 25% of the voting rights of the company.

Condition 3: a direct or indirect right to appoint or remove a majority of the directors of the company.

Condition 4: the actual exercise or right to exercise significant influence or control over the company.

Condition 5: the actual exercise or right to exercise significant influence or control over the activities of a trust or firm which itself meets one or more of the first four conditions.

Information required for the PSC Register

For an individual the information to be recorded as:-

Name.

Service address.

Usual country/state of residence.

A nationality.

Date of birth.

Usual residential address (this will not appear on the public record).

Date on which the individual became registerable.

Nature of control.

For an RLE the information required to be recorded is:-

Corporate/firm name.

Registered/principal office.

Legal form and governing law.

Applicable company register and number.

Date on which the legal entity became registerable.

Nature of control.

The PSC Register must never be empty.  Even while simply taking reasonable steps, this fact must be recorded on the PSC Register.  For example the Register should say in such circumstances:-

“The company has not yet completed taking reasonable steps to find out if there is anyone who is a registerable person or a registerable relevant legal entity in relation to the company.”

Even if there are no PSC’s or RLE’s, then the Register must include the following statement:-

“The company knows or has reasonable cause to believe that there is no registerable person or registerable relevant legal entity in relation to the company.”

Failure of PSC’s/RLE’s to give information

PSC’s/RLE’s commit an offence if they fail to make disclosure and the entity may apply sanctions to them, eg loss of voting rights.  The entity itself can commit a criminal offence if it does not apply with the PSC Register requirements, and imprisonment is a possible penalty.

Further advice/guidance

If you need further advice or guidance in respect of the PSC Register then please Daven Naghen on 01775 722261 or email daven.naghen@maplessolicitors.com or visit our offices or arrange an appointment at our offices at 23 New Road, Spalding, Lincolnshire PE11 1DH.