Significant Changes For Those With Significant Control - PSC Register News
- AuthorCraig Malarkey
Out With The New(ish) & In With The New(er)
In 2016 the UK introduced a new reporting standard and system into UK Company Law in an attempt to improve corporate transparency and accountability for those entities that actually control and own UK companies. Part 21A of the Companies Act 2006 requires certain companies and other legal entities to keep a register of people with significant control, and as such the “PSC Register” was born.
You can read about the PSC register generally in Matthew Smith’s article from April last year - here.
However, whilst many companies are still trying to get to grips with this new requirement, the government have extended this regime as part of the implementation of further European directives intended to combat money laundering. The amended rules put added emphasis on the obligation to report and update changes, making the register a more contemporaneous record, similar to the Companies House register of directors.
These rules came into effect from 26 June 2017
The New Regime - Main Changes
The main changes introduced are:
- Some legal entities previously excluded from the requirements are now captured by the Regulations. Companies with voting shares admitted to trading on a prescribed market, such as AIM, are required to create and keep a PSC register.
- Unregistered companies are required to create and keep a PSC register under the modified form of the PSC regime, which now requires entities to update Companies House in respect of all changes contemporaneously (see below).
For unregistered companies there is now an obligation to provide an update to Companies House of any changes to the PSC register within 14 days of the change. You may argue that as the company was already under a duty to maintain an up to date register internally, the additional obligation to return this information to Companies House is administrative only; however, just over 12 months into the PSC regime, many companies and LLPs are still not clear on the “old” requirements.
What Should I Do?
If you are a company director or member of an LLP and that company or LLP was in existence prior to 26th June 2017, you are under a duty to investigate its PSCs immediately. If there have been any changes to its PSC’s since its last confirmation statement was filed or it was incorporated, those changes must now be updated to Companies House via one of the prescribed forms (PSC01-09). If you are in any doubt as to your duties or have any concerns regarding compliance, the team at TBI is here to help.
All companies falling within the remit of the new legislation must maintain a PSC register. The register cannot be blank and failure to comply can lead to criminal offences being committed by the company / LLP and its officers.
If you are a shareholder or otherwise interested in a company or LLP and you think you may be a person with significant control, you are also advised to take steps to ensure your details are correctly registered. The company is under a duty to confirm these details with you and failure by you to cooperate is a criminal offence and could lead to restrictions being placed on your shares.
A company officer (or LLP) is required to:
- Identify the people with significant control and confirm the information held is accurate;
- Record the details on the PSC Register;
- Provide details to Companies House;
- Update the information on the PSC Register and at Companies House when there are changes; and
- Where a PSC is identified, serve notice on the PSC to confirm its status and details.
If you have any concerns with respect of this change to legislation and how it will affect your business, do not hesitate to get in touch as our team can advise you on all aspects of maintaining and completing the PSC Register, identifying whether or not an entity has “significant control” and notifying Companies House of necessary changes.