UK companies & LLPs are required to identify, record and publish who their ultimate beneficial owners and people with significant control are by maintaining and filing a register of Persons with Significant Control (PSC).
The Small Business, Enterprise and Employment Act 2015 introduced the requirement for UK companies & LLPs unless subject to other disclosure requirements to take reasonable steps to identify those whom they know or suspect to have significant control. This includes those who own or control, directly or indirectly, more than 25% of a company’s shares or voting rights.
Given that the individual or individuals who control a company are often different from those listed on the company’s register of shareholders, in many cases, the PSC register will look quite different from, and be a much more informative document than, the shareholder register.
The PSC register must be filed at Companies House each year. As part of the Confirmation Statement which replaced the Annual Return, the PSC register is available for public inspection and will be searchable online via Companies House.
The PSC Register enables transparency of who has actual control and prevents camouflaging who truly has control.
Who is a person with significant control?
A person or relevant legal entity will be a PSC if he/she/it:
- directly or indirectly owns more than 25% of shares
- directly or indirectly holds more than 25% of voting rights
- directly or indirectly has the power to appoint or remove the majority of the board of directors
- has the right to exercise or actually exercises significant influence or control
- has the right to exercise significant influence or control over the activities of a trust or firm, the trustees or members of which meet one or more of the conditions set out above or would do so if they were individuals.
Identification and inspection
Once a company has identified those whom it knows or suspects to have significant control it must give notice to the person requesting confirmation of their position and any relevant information. Potential PSCs are also obliged to notify the relevant entity if it has not received a notice and update certain changes to their details.
The register must be available for inspection by anyone upon request. It may be maintained at Companies House but must then be kept up to date at all times, otherwise, changes should be notified when the annual Compliance Statement is filed.
Even if there is no interest to be registered (or a company is dormant), a register must still be kept.
What appears on the register?
The Persons with Significant Control Register details:
- Service address
- Usual residential address (this will not appear on public record)
- Country, state or area of the UK in which the person usually resides
- Date of birth
- Date the individual became a PSC
- Nature of the PSC’s control
- Whether the individual has applied for their information to be protected from public disclosure of all persons or other companies with a significant interest in the company.
What are the penalties?
Failure to comply may result in a fine or imprisonment if committed by the officers and a possible disenfranchisement if it is the individual who fails to declare himself as a significant person.