April 6 has passed so now nearly every UK incorporated company limited by shares should have their PSC (People with Significant Control) registers in place and ready for inspection.
But is your PSC Register ready to be inspected?
The new regulations also cover companies limited by guarantee (including community interest companies) and Limited Liability Partnerships – totalling around 3.4 million companies in the UK.
Of course all these companies have been contacted well before April 6 by Companies House to make them aware of the new regulations. Right? Wrong!
Despite the fact that the regulations have serious sanctions for non-compliance, with potential criminal sanctions for individuals, companies, directors, PSCs in the form of fines, or potentially, imprisonment for failure to comply with the PSC obligations, there has been no advance warning.
Here are the most important points you should be aware of:
A PSC is an individual who meets one or more of the following conditions in relation to the company:-
• Directly or indirectly owning more than 25% of the shares.
• Directly or indirectly holding more than 25% of the voting rights.
• Directly or indirectly holding the right to appoint or remove the majority of directors.
It’s relatively simple so far for the vast majority of companies but for more complicated group structures or joint ventures more investigation will be required for the next two conditions:
• Otherwise having the right to exercise, or actually exercising, significant influence or control.
• Holding the right to exercise, or actually exercising, significant influence or control over the activities of a trust or firm which is not a legal entity, but would itself satisfy any of the first four conditions if it were an individual.
It seems a bit ironic in a month when politicians are now very keen to publish their tax returns, but what should the majority of the 3.4 million UK companies be doing to comply with the regulations?
• Take reasonable steps to find out if there are people who have significant control or influence over the company.
• Contact these people (or others who might know them) to confirm they meet one or more of the conditions and get the relevant information – It’s worth noting that PSCs (or anyone who might know about a PSC), must respond to these requests for information as they too are subject to the requirements.
• Put the information on the company’s own PSC register.
• File the information at Companies House (from 30th June 2016) when requested to file the ‘Check and confirm’ document that will replace the Annual Return. (another change not many companies know about)
• Keep the information up to date.
Bear in mind the potential penalties for non-compliance, although at this point it is not clear how the new regulations are to be policed and by whom.
You may still have questions, such as what will the effect be for charities registered as Guarantee companies and Community Interest Companies which already have considerable regulations to comply with? Will it see individuals stop or reduce their role within these ventures at a time when it is already difficult to attract funding and support?
If so, or if you or your clients need support or guidance regarding the PSC Register, Jordans Scotland can help.
Please call 0131 226 8280 or email firstname.lastname@example.org