Over the last few months, we have been following the implementation of the Small Business, Enterprise and Employment Act 2015, which has introduced a number of important changes to UK company law.
Further news and guidance has been issued in order to help businesses and individuals comply with the new rules which will come into effect from 6 April 2016.
We have outlined the main points from these guidance notes in case your business is affected.
How to identify a PSC
A PSC is defined as a person with 'significant control'. An individual can be described as such a person if they own or control more than 25% of a UK company's shares/voting rights, or if they have the ability to exercise significant influence or control over the company and/or its board. For more information, click here.
The information required to be recorded on the register
The information required is similar to that provided on the register of directors. The most important difference is that you must state which of the five conditions the individual meets for qualifying as a PSC. Official wording must be used for noting the conditions on the PSC register. To assist you with this, the official wording is annexed to the draft guidance notes.
The obligation to register this information with Companies House
From 30 June 2016, when a company is incorporated or when an existing company files its confirmation statement (formally its annual return), you will need to file this information at Companies House.
The requirement to keep this information up-to-date
You must keep your own PSC register up-to-date. Changes must be entered on the register as soon as you have been notified of a change. However, the obligation to update the PSC information at Companies House is an annual requirement.
Public and protected information
If you maintain your PSC register at your registered office, it must be accessible. Anyone, with a proper purpose, may have access to the register on request.
By filing your annual confirmation statement, the information shall also be available at the central public register at Companies House. Almost all the information about the PSC shall be accessible, apart from the residential address and date of birth of the PSC.
Keeping the information on their own register at Companies House
From June 2016, private companies and LLPs can opt to keep and maintain their own registers at Companies House rather than at their registered office. In this instance, updated information would therefore need to be sent to Companies House as soon as it is received in order to comply with the requirement to keep information up to date. You should note that if you choose this option, the only information that will be suppressed from the public record will be the PSC's residential address.
Unable to obtain information for the PSC register
If you are unable to get the necessary information for the PSC register, the guidance sets out a three–step process for imposing restrictions on those individuals or legal entities who fail to respond to requests for information. These are set out as follows:
- Notice requesting information
- Warning notice
- Imposing restrictions
In order to impose restrictions, a notice letter must be sent to the individual or legal entity. Restrictions could include conditions on shareholder rights or payment obligations in respect of their interest until the information is provided.
We recommend that if you are affected by the new rules you familiarise yourself with these draft guidance notes to assist with your compliance. The documents are available here.
Disclaimer
The material contained in this article is of the nature of general comment only and does not give advice on any particular matter. Recipients should not act on the basis of the information in this e-update without taking appropriate professional advice upon their own particular circumstances.
