From 6 April 2016, most UK companies and limited liability partnerships (LLPs) are required to publicly disclose ownership and control details to Companies House.
Relevant companies and LLPs must now keep a ‘Person with Significant Control’ (PSC) register and from 30 June 2016, all relevant companies and LLPs are required to file this information at Companies House. This can be done via the new ‘Confirmation Statement’ process (which will replace the ‘annual return’ in June 2016).
The above is applicable to all companies incorporated under the Companies Act in the UK, whether limited by shares, guarantee or unlimited, and includes dormant companies. Once a company has identified a PSC, a notice must be served on the potential PSC, as information provided must be confirmed by them or submitted with their knowledge.
Failure to comply is a criminal offence punishable by up to two years’ imprisonment, and may eventually result in the company being able to apply for restrictions on the shares held by that PSC (i.e. restrictions on payments of dividends or transfer of shares).
Who is a PSC?
A PSC can be an individual or company and will meet one (not all) of the following five conditions.
- Directly or indirectly hold more than 25% of the nominal share capital;
- Directly or indirectly control more than 25% of the company’s voting rights;
- Directly or indirectly hold the right to appoint or remove a majority of the board of directors;
- Actually exercise or have the right to exercise significant influence or control over the company; and/or
- Actually exercise or have the right to exercise significant influence or control over a trust or firm which itself meets one or more of the above four conditions.
The test for LLPs is very similar to the above conditions but is amended to reflect their different ownership structure.
Reasons for the requirement:
- To create greater transparency of the ownership and control of UK companies
- To help tackle crimes such as money laundering and tax evasion.
In summary, you must complete the following:
1. From 6th April 2016 you must now keep an internal register of PSC. Companies House has not prescribed the format of the register but we expect it will include the following information:
- Usual residential address
- Country, state or part of the United Kingdom in which you are normally resident
- Service address if applicable
- Date of birth
- Date on which you became a registrable person in relation to the entity
- The nature of your control over the entity as defined in Schedule 1A to the Act in the prescribed wording.
2. Maintain the register and update as and when required whether you have a PSC or investigating whether you have a PSC. It must never be blank.
3. Whether or not you have successfully applied to the Registrar of Companies under section 790ZG for the disclosure of these particulars to be restricted.