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Introducing the Register of People with Significant Control (The PSC Register)

The PSC Register

From 6 April 2016 almost all UK companies[1] and LLPs[2] must maintain a PSC Register. The PSC Register will make it possible to see not just who owns shares in a company but also who influences or controls a company discretely (a person with significant control). 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.

Who is a Person with Significant Control (PSC)?

A PSC is an individual who meets one or more of the following 5 threshold conditions for a single company, namely that he/she:

  1. directly or indirectly owns more than 25% of the shares in the company;
  2. directly or indirectly holds more than 25% of the voting rights in the company;
  3. directly or indirectly has the power to appoint or remove the majority of the board of directors of the company;
  4. otherwise has the right to exercise, or actually exercises, significant influence or control over the company; or
  5. has the right to exercise or actually exercises, 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, that legal entity’s details will need to be included in the PSC Register if it:

  • satisfies one or more of the 5 threshold conditions above; and
  • either:
    1. is required to keep its own PSC Register; or
    2. is subject to the FCA’s disclosure and transparency regime; or
    3. 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
  • 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 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 on 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 they are required to contact them to confirm details needed for the register. Companies must take steps to ensure that this information remains up-to-date.

PSCs 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.

How can we help?

If you have any concerns, for example if you are finding it difficult to calculate threshold requirements or ascertain who your PSCs are, or are concerned about how to write up your PSC Register, please do not hesitate to contact Toby StrohAntony Cotton or Claire Rigby.

 

[1] with the exception of companies that are subject to the FCA’s disclosure and transparency regime, and companies with voting shares admitted to trading on a regulated market in the UK or EEA (other than the UK) or on specified markets in Switzerland, the USA, Japan and Israel.

[2] the term “companies” will also be deemed for the purposes of this note to include  “LLPs”.