1st March 2016

New Companies House filing requirements for Persons with Significant Control

New Companies House filing requirements for Persons with Significant Control

From June 2016, the information regarding persons with significant control (PSCs) must be included on initial incorporation documents, or otherwise on a new “Confirmation Statement” to be filed with Companies House which will replace the current Annual Return form which companies and LLP’s file.
Definition of a PSC:

An individual will be a PSC of a company if he or she meets any one of the following five conditions:

  • he/she holds, directly or indirectly, more than 25% of the shares in the company;
  • he/she holds, directly or indirectly, more than 25% of the voting rights in the company;
  • he/she has the right, directly or indirectly, to appoint or remove a majority of the board of directors of the company;
  • he/she has the right to exercise, or actually exercises, significant influence or control over the company;
  • he/she has the right to exercise, or actually exercises, significant influence or control over the trustees of a trust or the partners of a firm, which is not a legal entity and which would meet one or more of the above conditions if it was an individual.

The criteria for LLPs is as above, but adapted slightly to reflect their structure.
In addition to recording the names of individuals with significant control over a company, a company’s PSC Register may need to record the names of legal entities with control.
A ‘relevant legal entity’ in relation to a company is a legal entity which (a) would have been classed as a PSC had it been an individual; and (b) is subject to its own disclosure requirements (i.e. it has to maintain its own PSC Register or is exempt from doing so).
Duty to request and provide information:
A company or LLP is required to take “reasonable steps” to discover all registerable PSCs by reviewing the information available to it and issuing notices to such persons or legal entities requesting missing information or confirming that the information held is correct.
Failure to give such notice will be an offence by the company or LLP and every officer or designated member in default. The punishment is imprisonment and/or a fine.
The company or LLP may also give notice to any individual, who the company or LLP reasonably believes will know the identity of a registrable person or entity giving the recipient 1 month to respond.
Where an individual knows or ought to know that he or she is a PSC; then that individual has a proactive obligation to notify the company or LLP and to give the relevant information within one month.
The company may apply sanctions where the potential PSC recipient fails to provide the information required. If the information is not provided within a one month period, the company can issue a restrictions notice, whereby no rights may be exercised in relation to that person’s shares and any transfer of the shares will be void.
Information to be included in the PSC Register:
The information to be included in the PSC Register will be as follows:

  • Individuals: name, service address, country or state of usual residence, nationality, date of birth and usual residential address.
  • Relevant legal entities: firm or corporate name, registered or principle office, legal form of the entity, the law under which it is governed, the register of companies in which it appears and registration number (where applicable).
  • In both cases the following information must also be included: the date on which an individual or relevant legal entity became a PSC, the nature of its control over the company or LLP and details of any restrictions on shares due to non-compliance with providing the required information.

The information on the PSC Register must be kept up-to-date and should be made available for public inspection free of charge (or copies should be provided on request for an optional fee of £12). All private companies and LLPs must keep a PSC Register even if they have no registerable PSCs.
The residential addresses of PSCs will be kept by the company but will not appear on the public register. Where an individual considers himself/herself to be at serious risk of violence or intimidation due to the activities of the company he/she is involved in, then he/she may apply to Companies House to prevent all of his/her PSC information from being disclosed on the public register.
For UK companies with fairly simple structures the new requirements should be reasonably easy to comply with. For companies with complex group structures it may prove to be more of a challenge.
Lester Aldridge will be happy to assist you should you have any queries regarding PSC Registers.