From 30 June 2016, this information will also need to be delivered annually at Companies House by each company when filing its confirmation statement (which from that date will replace the annual return).
Newly incorporated companies will, from 30 June 2016, also be required to include a statement of initial significant control as part of their incorporation application.
Throughout this note, reference is made to Companies but this applies in the same way to Limited Liability Partnerships as well.
Who is a Person with Significant Control (PSC)?
A PSC is an individual who meets one or more of the following five threshold conditions for a single company, namely that they:
- directly or indirectly own more than 25% of the shares in the company;
- directly or indirectly hold more than 25% of the voting rights in the company;
- directly or indirectly have the power to appoint or remove the majority of the board of directors of the company;
- otherwise have the right to exercise, or actually exercise, significant influence or control over the company; or
- have the right to exercise or actually exercise, significant influence or control over a trust or firm that is not a legal entity, which in turns satisfies any of the first four conditions.
Where a company is owned or controlled by another legal entity (for example another company or LLP), that legal entity’s details will need to be included in the PSC Register if it satisfies one or more of the five threshold conditions above; and either:
a) is required to keep its own PSC Register; or
b) is subject to the FCA’s disclosure and transparency regime; or
c) has voting shares admitted to trading on a regulated market in the UK or EEA (other than the UK) or in specified markets in Switzerland, the USA, Japan and Israel; and
d) is the first such legal entity in the company’s ownership chain that satisfies both a) and b).
Where an individual’s ownership interest in a company is indirectly held through a legal entity satisfying conditions a), b) and c) above, that individual’s details are not required to be included in the company’s PSC Register (unless he or she satisfies threshold conditions 4 and/or 5 above).
Contents of the PSC Register
The PSC Register will contain various details of each PSC (similar to the information found regarding directors in a company’s register of directors) as well as information about the person’s significant control. Not every company will have a PSC, but if a company has no PSCs then the PSC Register must record that fact.
Duties on companies and PSCs
Companies must take “reasonable steps to identify their PSCs”, if any. Once identified, Companies are required to contact them to confirm and obtain the details needed for the register. Thereafter, Companies must take steps to ensure that this information remains up-to-date and to maintain the register accordingly.
PSCs also have obligations and must provide companies with their details if they are not already stated or are stated incorrectly in the PSC Register.
Companies and PSCs that do not take appropriate measures to gather or provide the information they are required to, or that knowingly or recklessly give incorrect information, commit a criminal offence punishable by a fine or imprisonment.
Access to the PSC Register
Members of the public generally are entitled to view, or call for copies of, a company’s PSC Register.
Do you need help with your PSC Register?
If you have any concerns, for example if you are finding it difficult to assess or determine whether threshold requirements apply or ascertain who your PSCs are, or are concerned about how to write up your PSC Register, then please contact a member of our Commercial team at CommercialDept@woodfines.co.uk