Michael Stewart, Associate in our Corporate department discusses corporate transparency and the PSC register.

The government is increasingly seeking to make England and Wales a transparent place to do business. Companies House has confirmed that it aims to support the Government’s commitment to make the UK the most transparent place in the world to do business The PSC (persons with significant control) register requirements are an important step in this process.

The government states that, ‘the PSC register will help to increase transparency over who owns and controls UK companies and will help inform investors when they are considering investing in a company. It will also support law enforcement agencies in money laundering investigations’. In short, the PSC register should make it easier to discover who actually owns and / or controls a company (and other entities, although this post relates to companies only), information that HMRC and those responsible for enforcing money laundering regulations might be particularly interested in.

How does it work?

An officer of the company is required to:

  • Identify the people with significant control (PSCs) over the company and confirm their information
  • Record the details of the PSC on the company’s own PSC register
  • Provide this information to Companies House as part of the annual Confirmation Statement (formerly the Annual Return); and
  • Update the information on the company’s own PSC register when it changes, and update the information at Companies House when the next Confirmation Statement is made.

Who is a PSC?

Companies House guidance states that a PSC is an individual who meets one or more of the following conditions:

  • An individual who holds more than 25% of shares in the company.
  • An individual who holds more than 25% of voting rights in the company.
  • An individual who holds the right to appoint or remove the majority of the board of directors of the company.
  • An individual who has the right to exercise, or actually exercises, significant influence or control over the company.
  • Where a trust or firm would satisfy one of the first four conditions if it were an individual. Any individual holding the right to exercise, or actually exercising, significant influence or control over the activities of that trust or firm.

What information is required?

The details required are:

  • name
  • date of birth
  • nationality and country, state or part of the UK where the PSC usually lives
  • service address;
  • usual residential address (this must not be disclosed when making your register available for inspection or providing copies of the PSC register)
  • the date he or she became a PSC in relation to the company
  • which conditions for being a PSC are met (for conditions 1 and 2 above  this must include the level of their shares and voting rights, within the following categories: Over 25% up to (and including) 50%, /  More than 50% and less than 75% / 75% or more. The company is only required to identify whether a PSC meets condition 4 if they do not exercise control through one or more of conditions 1  to 3

What is the penalty for non- compliance?

Failure to provide accurate information on the PSC register and failure to comply with notices requiring someone to provide information are criminal offences, and may result in a fine and or a prison sentence of up to two years.

If you need any advice on the issue of PSC’s or any other corporate matter, please do not hesitate to contact our corporate department on  0161 832 6131.

 

This blog was written by:  Michael Stewart