Company Legislation – The Register of People with Significant Control

Company Legislation – The Register of People with Significant Control 

The Small Business and Employment Act of 2015 introduced a new obligation for companies to maintain a Register of People with Significant Control. This requirement aims to enhance transparency and address concerns about the intricate structures of various corporate organisations, extending compliance even to the smallest limited companies.

The Register of People with Significant Control, commonly known as the PSC Register, identifies individuals and other companies exerting considerable influence within a business. The need for increased transparency arose from discussions about challenges posed by the intricate structures of large organisations during the 2013 G8 Summit, leading to the introduction of this register as part of measures to promote transparency.

 

Criteria for identifying PSCs

Starting from the 6th of April 2016, it became mandatory to identify and transparently declare individuals with significant control in a company. All company directors are required to take reasonable steps to ensure compliance, as non-compliance carries severe penalties. Here are the criteria to help you identify the requisite individuals and entities.

A person with significant control will, either directly or indirectly:

• Own more than 25% of shares
• Own more than 25% of voting rights within a company
• Hold the authority to appoint or remove the majority of directors from the board
• Retain the right to exercise ‘significant influence or control’ within the business
• Retain the right to exercise ‘significant influence or control’ over a trust or non-legal entity, whose trustees or members can be identified by any of the preceding criteria

 

What do you need to do in practice?

It is essential to “take reasonable steps to identify” individuals with significant control and maintain a register containing their details. Since April 2016, the PSC Register must include certain information and should not be left blank, even if you document the steps taken to comply.

This requirement is continuous, and starting from June 2016, the information must be submitted annually to Companies House, along with a confirmation statement. Non-compliance is considered a criminal offence and can result in substantial financial penalties or even imprisonment.

Notification must be given to individuals who qualify as PSCs, requesting their confirmation. In case of non-response, you have the authority to apply sanctions. Notices should also be sent to anyone believed to be aware of someone holding significant control.

Individuals are responsible for actively providing information, and failure to respond may lead to criminal action against them.

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What information is needed?

When dealing with an individual, you need to include the following details for the PSC Register:

• Name
• Date of birth
• Nationality
• Service address
• Regular country of residence
• Regular residential address (doesn’t appear on the register)
• Nature of their control, and the date it began

For a relevant legal entity (RLE):

• Company name
• Company number
• Registered address
• Legal form
• Nature of their control, and the date it started

Vanguard Insolvency is ready to assist you. We can guide you in setting up your register and ensure compliance with all requirements. Call today for a free and secretive meeting.