‘Persons With Significant Control’ Guidance Released

Non-statutory guidance advising companies and trusts on compliance with the new Register of Persons with Significant Control (PSC) has been released by the UK Government.

The beneficial ownership of almost all British companies, Societates Europaeae and limited liability partnerships will be featured in the PSC register.

From 6th April a PSC register must be maintained at the company’s registered office and available for public inspection for a fee of £12. This register must be filed at Companies House by 30th June (again open to public inspection), and updated every year – this replaces the annual returns previously submitted to Companies House.

Definition of ‘Persons with Significant Control’

According to the new guidance, a ‘person with significant control’ is an individual who either:
• holds more than 25% of the shares or voting rights
• or the right to appoint or remove a majority of directors, or
• ‘otherwise having the right to exercise, or actually exercising, significant influence or control’.

Trusts

The guidance states:
‘If an individual has significant influence or control over the activities of a trust or firm, which would be a PSC of the company if it were an individual, then you should enter that person’s details on the PSC register. If a registrable relevant legal entity (RLE) controls the trust or firm then its details must be entered on the PSC register. If a legal entity which is not an RLE controls the trust or firm, then you should continue to explore the ownership chain until you have identified an individual or registrable RLE with majority ownership of that legal entity, or are confident none exists. […] If someone other than the trustees, such as the settlor or beneficiary of the trust, or partners has the right to exercise significant influence or control over the trust or firm, then they would also be shown on the register […].’

Consequences For PSC who Fail to Supply Necessary Information

According to the guidance, in the case of a PSC repeatedly not complying, one ‘reasonable’ measure a company could take is to restrict the individual’s shares or rights. ‘Your company is not required by law to impose restrictions in these circumstances, but you must seriously consider it as part of meeting your legal requirements to take reasonable steps.’

The document comprises 86 pages, covering many complex issues, but will be required reading for trustees and company directors over the next four months.

Click here for the Register of People with Significant Control Guidance for Companies, Societates Europaeae and Limited Liability Partnership published by: