20th May 2016

INFORMATION UPDATE

 Issue No.  2016/11

 Sentient
              

 

 Who’s in Charge and are They on a List?

Do you know your “Persons with significant control”?

You might be surprised to hear that with effect from 6th April 2016 most UK companies and LLPs are required to keep a register of individuals who are the organisation’s ‘ultimate beneficial owners and controllers’ This is termed the Person with Significant Control Register or PSC Register.  Furthermore, from 30th June 2016 this information must be filed at Companies House.  This will be done via a confirmation statement which will replace the annual return from this date.

The new requirement stems from the Small Business, Enterprise and Employment Act 2015 – it has not been widely commented on (well it is not that exciting is it?!) so may have passed you by. If nothing else, it might provide something to counter Brexit fatigue!!

The reasoning behind this new obligation comes from Government’s belief that increased transparency will help combat tax evasion, money laundering and terrorist financing by creating a full picture of both the legal and beneficial ownership of businesses.  Just in case you were wondering, the EU has also introduced similar measures in the Fourth Money Laundering Directive which came into force on 25th June 2015 and must be implemented by all member states by 26th June 2017 so it looks like we’re ahead of the game with this and will have to continue complying whether we are in or out of the EU.

The rules apply to all UK companies, except those subject to Chapter 5 of the Financial Conduct Authority’s Disclosure and Transparency Rules (DTRs) who already have to disclose such information.  The rules also apply to LLPs and to UK registered European Companies (Societates Europaeae). 

Persons in Significant Control (PSCs) are people who meet one or more of the five conditions outlined:

  1. directly or indirectly hold more than 25% of the nominal share capital; or
  2. directly or indirectly control more than 25% of the votes at general meetings; or
  3. directly or indirectly be able to control the appointment or removal of a majority of the board; or
  4. actually exercise, or have the right to exercise, significant influence or control over the company; or
  5. actually exercise or have the right to exercise significant influence or control over any trust or firm (which is not a legal entity) which has significant control (under one of the four conditions above) over the company.
  6. There is a detailed guidance pdf from the Government which can be found by clicking here: 

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/515720/Non-statutory_guidance_for_companies__LLPs_and_SEsv4.pdf

In summary, someone has to obtain specified information about PSCs and standard letters are provided in the guidance document.  Those persons contacted for information are legally obliged to respond, with failure to do so being a criminal offence.  The information you have to put on a register about each PSC is:  

  1. Name
  2. Date of birth
  3. Nationality
  4. Country, state or part of the UK where the PSC usually lives
  5. Service address
  6. Usual residential address (If the residential address has already been given because it is also the service address, then you do not need to give it again);
  7. The date when the individual became a PSC in relation to your company
  8. Which of the five conditions for being a PSC the individual meets, with quantification of the interest where relevant
  9. Any restrictions on disclosing the PSC’s information that are in place

The PSC Register must be kept at the registered office (or other inspection address) and be available for public inspection in the same way as for the register of members.  Companies are obliged to provide free access to the PSC Register and provide copies of it to any person on request for a flat fee of £12 per copy.

From 30th June 2016 the information on the PSC Register will be confirmed to Companies House at least every 12 months and will be held there on a publically searchable database.  

Full details including template letters are contained within the guidance (link above).


 

 

 

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