By Mark Redmond, 28th July 2016
On the 6th of April 2016, the requirement to create and maintain a register of people with significant control (PSC register) came into effect. This new requirement is applicable to UK private companies and LLPs. From the 30th of June 2016, the information held in these registers is expected to be filed at the Companies House when the company submits its annual confirmation statement.
What is the PSC register?
The PSC register is a new statutory register introduced in the Small Business, Enterprise and Employment Bill (SBEE). It requires Private companies and LLP’s to identify persons who have ownership of more than 25% of their shares. The aim of the PSC is to increase corporate trust and transparency in the United Kingdom and to combat both tax evasion and money laundering activities.
Who is required to keep a PSC register?
The following entities are required to create and maintain a register of people with significant control:
- Private Companies Limited by Shares
- Private Companies Limited by Guarantee
- Limited Liability Partnerships
- Societas Europaea
Who is considered a person with significant control?
A person with significant control can be either an individual or a legal entity, such as a corporate body. Any individual who meets one of the following criteria is considered to be a person of significant control:
- Holds more than 25% of shares
- Holds more than 25% of the voting rights of the company
- Has the authority to appoint or remove the majority of company’s directors
- Exercises, or has the authority to exercise, significant control over the company
- Exercises, or has the authority to exercise, significant control over the activities of the firm which is not a legal entity, but if were an individual, would satisfy one of the first four conditions
For the majority of companies and LLP’s, it will be obvious who has ultimate control and ownership pf the business. However, for larger firms with numerous shareholders and controllers, it may be more complex.