From April 2016, companies will be required to maintain a register of persons with significant control ("PSC") over that company. That means formally documenting details of who exercises control or influence over a company.
Does this assist office holders?
The new requirements do go some way to assisting office holders, particularly in the context of their investigations into the affairs of the insolvent company and the conduct of directors. The PSC register will be a useful starting point for office holders when considering actions to be brought against directors or third parties for antecedent transactions such as voidable preferences, undervalues or wrongful / fraudulent trading. Identifying or even narrowing the identity of the controlling minds / those involved could assist the office holders' focus and enhance targeted actions.
The requirements may also assist in the office holder's assessment of who might be shadow directors, de facto directors or whether the person is "connected".
Whilst this is a positive step in terms of general corporate governance and transparency, those who deal with the murkier end of the spectrum remain concerned about the actual impact on many cases. Notwithstanding the criminal and civil sanctions for non- compliance, this will not affect those who have no regard for the rule of law in any event - they will continue to remain in the shadows of the entity and utilise stooge or nominee directors / shareholders as a front for illegitimate or illegal purposes.
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.