PSC guidance for companies
Paul Plaxton, 4th July, 2016
Update on PSC Register & new Companies House filing requirements came into force on 30th June 2016
The Government has recently announced the next steps businesses need to take to comply with the new PSC or ‘persons with significant control’ register from 30th June.
A quick recap...
On 6th April 2016, a new law came into force requiring every legal entity within the scope of Part 21A of the Companies Act 2006 to create and maintain a register of people with significant control (PSCs). This is known as the ‘persons with significant control’ or PSC Register (‘the Register’).
The Register should not only display individuals but also relevant legal entities (RLEs), which would hold control of the company if they were individuals. Each UK holding company and subsidiary must have a separate Register – a copy of which can be requested/inspected.
The Register’s required particulars differ for PSCs and RLEs, but are designed to include all the necessary information to identify those listed within it. This includes a statement(s) in relation to the nature of the control each individual/entity holds. There are five specified conditions that enable companies to assess who is a registrable PSC or RLE. Each specified condition has official wording, which ought to be displayed on the Register if applicable.
The Register of People with Significant Control Regulations 2016 prescribes the information to note in the register in a number of different circumstances, including when the company is still making enquiries as to if there are any PSCs and RLEs.
For some companies this may be a lengthy process, and for others this may be a relatively straight forward process. However, under the Companies Act 2006 each company is required to send a notice to anyone it knows or has reasonable cause to believe, to be a registrable PSC or registrable RLE requiring the PSC/RLE concerned:
- To confirm whether he, she or it is a registrable PSC or registrable RLE, in relation to that company
- Where the person confirms that status, also to confirm or correct any of that person’s required particulars that are stated in the notice, and to supply any that are missing.
- To respond within one month beginning with the date of the notice.
In the event a legal entity (required to hold a Register) concludes that there are no registrable PSCs or RLEs, there is also a regulation that states what to put in the Register. The regulations make it clear that if this is the case the company must still possess a Register and this can't simply be blank.
Failure by a company to fulfil either their duty to investigate and obtain information or their duty to keep the Register up to date is a criminal offence.
The Government hopes the PSC Register will give a clearer picture of both the legal and ‘beneficial ownership’ of businesses with a view to helping combat tax evasion, money laundering and terrorist financing. It is thought to be the case for some companies that the Register will display an entirely different picture to the existing information already filed by a company which will allow for more transparency in mergers and acquisitions benefitting both buyers and sellers.
The new filing requirements
The filing requirements for new and existing companies changed from 30th June 2016, instead of filing an annual return companies are now required to file a confirmation statement. PSC information will be required to be filed at Companies House as part of the entity's confirmation statement. In addition, from 30 June 2016 companies are able to elect to keep their PSC Register (as well as other statutory registers) at Companies House.
Just like the annual return, it will be an annual filing obligation for all UK companies, whether trading or dormant, and for LLPs. Before 30th June 2016, companies will continue to submit annual returns. That includes any return with a made up to date of 29th June or before, but which is filed on or after 30th June 2016.
For review dates starting from 30th June 2016, a confirmation statement will be required instead of the annual return. If, instead, you submit an annual return, it will be rejected by Companies House.
New companies within the scope of part 21A of the Companies Act 2006 incorporated after 30th June 2016 must create a PSC Register on incorporation and file a statement of initial significant control at Companies House. This will form part of their first confirmation statement, which replaces the annual return from this date.
You can download the Register of People with Significant Control Regulations 2016 here.
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