UK: What Companies Need To Do To Prepare For The New Beneficial Ownership Regime

Last Updated: 14 July 2015
Article by Edward Craft and Charlotte Baker

Significant changes to Companies Act 2006 are in the process of coming into effect. Most significantly, from 1 January 2016 companies will need to keep and maintain a new register that records all the people or legal entities that have significant influence or control over it, the register of people with significant control (the PSC register). The provisions regarding the PSC register are set out in the new Part 21A Companies Act 2006, introduced by what has previously been described as the misleadingly titled Small Business, Enterprise and Employment Act 2015.

The regime is being introduced very quickly. The draft statutory instrument containing much of the detail has only recently been put out for consultation and the relevant guidance will only be published in the autumn.

The information will be available publicly, including at Companies House.

Companies need to get ready now and should not wait until the full set of subordinate legislation and guidance is in place.

What companies will need to do

There is a lot for companies to do. Set out below is a summary of the key requirements:


find out who has significant control of the company


contact these people to confirm the position and obtain required information


create and maintain a register


explain why if there is missing information


allow people with a proper purpose to inspect the register


give the register information to Companies House from April 2016


if people who control shares do not respond to requests for information, consider putting restrictions on their shares

Who are the 'people with significant control'?

A person with significant control is someone that meets one or more of the following conditions for a single company:

i. directly or indirectly owns more than 25% of the shares;

ii. directly or indirectly holds more than 25% of the voting rights;

iii. directly or indirectly has the power to appoint or remove the majority of the board of directors;

iv. otherwise has the right to exercise or actually exercises significant influence or control; or

v. 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 turn satisfies any of the first four conditions.

Condition (iv) will capture formal and informal forms of influence or control. Statutory guidance about the meaning of 'significant influence or control' should be used to help establish whether a person has significant influence or control.

If there are no people or a legal entities that fulfil any of the conditions (i) - (v) above, the company should still hold a PSC register and should state on the register that there are no registrable people or entities.

Corporate groups

A corporate entity which is part of a company group might exercise significant control and fulfil the relevant criteria. A company must only record a legal entity in its PSC register as a "registrable relevant legal entity" if such entity exercises significant control and is also:

  • required to hold its own PSC register; or
  • subject to Chapter 5 of the Disclosure and Transparency Rules (as set out in the FCA/PRA Handbook); or
  • has its voting shares admitted to trading on a regulated market in an EEA state.

Companies required to take reasonable steps

Companies must take reasonable steps to find out if there are any people with significant control, this may include considering the register of members and writing to company members to ask if they have transferred an interest in their shares to someone else. Failing to take reasonable steps is a criminal offence for which both the company and its offers are liable. It will also be a breach of statutory duty for the directors.

A company should serve a notice on a person or entity asking them to confirm that they have significant control or are a registrable relevant legal entity. The notice should also ask them, if they are a person or entity that should be registered, to confirm, correct or give information needed for the register.

It is a criminal offence for the people or entities not to respond to these notices within a month.

If people or entities do not respond to notices seeking information for the register, eventually restrictions may be placed on their interest in the company.

People or entities that do not respond to a notice (unless the notice was frivolous or vexatious) or knowingly or recklessly give false information in response to a notice may have committed an offence and may face imprisonment for up to two years or a fine or both.

Obtaining information from third parties

Companies can use the legislation to require people who do not have significant control, but may know about people or entities with significant control, to provide information. This makes it easier for companies to get information they need by contacting lawyers, banks, professional advisers or other third parties. Companies may give notice to any third party if they have reason to believe that they know the identity of:

  • any people with significant control
  • any registrable relevant legal entities
  • any legal entities that have significant control but are not subject to their own disclosure requirements

Notices to third parties may ask people to give any information they know that might help the company identify a person or entity with significant control, or of any person likely to have that knowledge.

Once obtained, information must be confirmed as only confirmed information can be put on the register.

Updating information

Changes are needed to the register if any information is no longer correct. Companies must give notice to people or entities as soon as they learn of change or have reason to believe that there has been a change. This includes change of address.

This notice must ask the person or entity to confirm that a change has occurred to give the date of the change and confirm, correct or supply any information as appropriate.

If a company fails to obtain up to date information when they have reason to believe an update is needed, the company and its officers may have committed an offence. On conviction they could face a prison sentence of up to two years or a fine (or both).

People and entities should be pro-active about informing the company about changes that should be made to the register. It is an offence for people or entities not to do this when they are aware of changes that need to be made.

Recording the nature of control

For each person or entity included in the register, the register should state which of the five conditions (i)-(v) the person or entity satisfies and the banding of any share ownership or voting rights control.

Other statements that must be noted on the register

The company must, as the case may be, include certain further statements on its PSC register if it is not a complete register, for various reasons. These statements are that the company:

  • believes that it has no people with significant control or relevant legal entities
  • has reason to believe that there is a person with significant control and has taken reasonable steps to identify the person but has not been able to
  • has identified that there is a person with significant control but does not have the persons confirmed particulars
  • does not know if it has any people with significant control or relevant legal entities
  • has issued notices and the recipient has failed to respond
  • has placed restrictions on shares

For as long as restrictions are in place the shares are effectively valueless to the holder and the lifting of restrictions cannot have any pre-dated effect.

Registrable relevant legal entities

Not all relevant legal entities should appear on the register. To avoid the duplication of information on registers, where a company is owned through a chain of relevant legal entities, only the relevant legal entity that is immediately above it in the chain would appear on the register. That relevant legal entity is a 'registrable relevant legal entity' and the other relevant legal entities are non-registrable.

Next steps

The statutory instrument and guidance will be published in the autumn. Companies should start to think about the complexion of the share register to understand where PSC issues may arise and prepare itself for the period 1 January 2016 to 31 January 2016 when it will need to issue notices. To delay beyond the end of January 2016 is an offence, but similarly, the investigation cannot be conducted earlier, because the legal regime requiring complete and honest responses to letters from the company and linked sanctions and offences will not be in place.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Edward Craft
Charlotte Baker
In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.