Business Bites: Have you prepared your Company’s PSC Register?
Date: 29/03/2016 | Corporate
From 6 April 2016, UK companies, SEs and LLPs will require to prepare and maintain a Register of Persons with Significant Control (PSC Register). The purpose of the PSC Register is to provide greater transparency around who controls UK entities.
The PSC Register will require to be stored in your company’s statutory registers and, from June 2016 onwards, filed annually with Companies House together with the company’s Confirmation Statement (which will replace the Annual Return).
A person with significant control over a company (PSC) is an individual or entity who meets one or more of the following conditions:
- The person holds, directly or indirectly, more than 25% of the shares in the company.
- The person holds, directly or indirectly, more than 25% of the voting rights in the company.
- The person holds the right, directly or indirectly, to appoint or remove a majority of the board of directors of the company.
- The person otherwise has the right to exercise, or actually exercises, significant influence or control over the company.
- The person has the right to exercise, or actually exercises, significant influence or control over an arrangement such as a trust, which is not a legal entity but which meets any of the other specified conditions in relation to the company, or would do so if it were an individual.
Various guidance documents have been published in order to assist in complying with the new requirements. It should be noted that these requirements introduce new legal duties, and failure to comply with these legal duties is a criminal offence which could result in a fine and/or imprisonment.
How do I Identify my Company’s PSCs?
- Read the relevant guidance document for your type of entity.
- Check your company’s register of members for details of any individual/entity holding more than 25% of the shares or voting rights, as these persons will meet conditions 1 and 2 above. Note the guidance on how to proceed if a shareholder is not a relevant legal entity (RLE) and the further steps which are required to be taken.
- Check the company’s Articles of Association and other relevant agreements which provide any one director with the power to appoint or remove a majority of its board of directors. If your company only has one director, then this director will meet condition 3 and should be added to the PSC Register.
- Conditions 4 and 5 will apply in more limited cases. For example, a person who is not a director and who does not have any shareholding could still exercise significant influence or control over a company, and the guidance sets out examples of where a person may meet condition number 4. Condition 5 will apply if a trust or firm without legal personality has any control over your company, and meets any of the previous conditions. If someone has significant influence or control over such trust or firm then they will require to be added to the PSC Register.
It may be that your company does not have any PSCs, and a statement can be included in the PSC Register to reflect this. A PSC Register cannot be left blank, and the guidance sets out the official statements which must be used when completing your company’s Register.
The Davidson Chalmers corporate team are currently preparing PSC Registers for its company secretarial clients. If you would like to engage our company secretarial services, please drop us an email at email@example.com.