PSC register and confirmation statements
The register of People with Significant Control (PSC register) brings about a new requirement for almost all UK companies (including dormant companies), Societates Europaeae (SEs) and Limited Liability Partnerships (LLPs) to keep a register of individuals who own or control their company. The new rules came into effect on 6 April 2016.
The PSC register contains details of all individuals who meet one or more of the following conditions in a company:
- An individual who directly or indirectly holds more than 25% of shares in the company.
- An individual who directly or indirectly holds more than 25% of voting rights in the company.
- An individual who holds the right either directly or indirectly to appoint or remove the majority of the board of directors of the company.
A legal entity that satisfies any of the PSC conditions, referred to in the legislation as Registrable Relevant Legal Entities (RLEs) must also be included on the PSC register. There are similar rules for companies owned or controlled by an ‘other registrable person’ who are deemed to be PSCs if they meet the relevant conditions.
Companies need to make their own PSC register available for inspection on request at the company’s registered office or provide copies. Starting from 30 June 2016, companies must deliver this information annually to the central public register at Companies House when making a confirmation statement.
The confirmation statement will replace the annual return and the change is being introduced as part of the Small Business, Enterprise and Employment (SBEE) Act 2015. The company’s PSC information will need to be entered as part of the process of completing the confirmation statement. The confirmation statement must be filed at least once every 12 months and rather than resubmitting data every year the confirmation statement need only be updated if there are changes to report.
Companies that do not immediately know the identity of a PSC must take reasonable steps to identify them for the PSC register. Failure to provide accurate information on the PSC register and failure to comply with notices requiring someone to provide information are criminal offences, and may result in a fine and or a prison sentence of up to two years. There are similar reporting requirements for LLPs.