Since 6 April 2016, most companies and LLPs are required to hold a specific register of ‘People with Significant Control’, a PSC Register. There is now an obligation to take reasonable steps to identify if there are any individuals and legal entities who hold significant control based on a number of criteria that include both direct and indirect control. This can become particularly challenging when complex chains of ownership including groups of companies and trusts are involved. Failure to meet obligations under the new legislation may constitute an offence by the company and its officers.
The legislation sets out five specified conditions for an individual to be a Person with Significant Control (PSC). If a person meets any one or more of the following conditions then such person will be regarded as a PSC:
The PSC Register will need to specify the extent and nature of the control by referring to the relevant condition met and will also contain details of the persons and legal entities identified as registrable PSCs and RLEs. If circumstances change, the information entered on the company’s own PSC Register must be updated.
Companies and LLPs will be required to take steps they see fit to fulfil their obligations under the PSC regime. From 6 April 2016, a company’s PSC Register can never be blank and, if the company is not in a position to complete its Register, it must insert relevant official wording in the Register to reflect the progress of its investigations.
For companies incorporated before 30 June 2016, the company’s PSC information will need to be entered on the first confirmation statement with Companies House, which will replace the annual return from June onwards. Companies incorporated after 30 June 2016 will need to complete a statement of initial control containing the company’s PSC information as part of the incorporation process. The information registered with Companies House will have to be updated at least once a year.