Requirement to maintain a PSC register

October 14, 2016

With effect from 6th April 2016, most UK companies are now required to maintain a register of persons with significant control (PSC). This information will need to be provided to Companies House from 30th June 2016 as part of the requirement for companies to file a ‘confirmation statement’ (which replaced the ‘annual return’ requirement).

Who is a PSC?

A PSC is an individual meeting at least one of the following conditions:

  • Direct or indirect ownership of more than 25% of shares in the company;
  • Direct or indirect control of more than 25% of the voting rights in the company;
  • Direct or indirect ability to control the appointment or removal of a majority of the board of directors of a company;
  • Exercise or have the right to exercise significant influence or control over the company; or
  • Exercise, or have the right to exercise significant influence or control over an arrangement which is not a legal entity (i.e. a trust) if the arrangement which is not a legal entity would itself have been a PSC if it were an individual.
  • If a company is owned or controlled by another company or legal entity, rather than an individual, then that legal entity must be put onto the company’s PSC register if it is a ‘registrable relevant legal entity’ (RRLE).

A company or legal entity is relevant if it meets any of the above criteria and

  • It also keeps a PSC register; or
  • It is subject to FCA Disclosure and Transparency Rules; or
  • It has voting shares admitted to trading on a regulated market in the UK, European Economic Area or other specified markets such as the USA.
  • It will be registrable so long as it is the first relevant legal entity in the company’s chain of ownership.

Indirect Interests

Shares or rights in a company may be held indirectly where a legal entity holds shares or rights and someone has a majority stake in that legal entity. If there is in an individual or RRLE with a majority stake in that legal entity then their details must be entered on the PSC register. If there is another legal entity that is not an RRLE then its ownership must in turn be investigated and so on until an individual or legal entity with a majority stake is found. If there is no ultimate owner who meets these criteria (ie. where no-one holds a majority stake in the ultimate parent entity) then this fact must be entered on the PSC register.

Further criteria are used to determine whether someone holds a majority stake in a legal entity, though they include holding a majority of the voting rights. A person holding a majority stake is not required to be entered on the PSC register unless the legal entity they hold their interest through is not a RRLE.

Duty on companies

Companies are under an obligation to take reasonable steps to find out if there is anyone who is a registrable person or a RRLE in relation to the company and, if so, to identify them.

A company must also give notice to anyone whom it knows or has reasonable cause to believe to be a registrable person or a RRLE in relation to it, and the registrable person or RRLE must confirm if they are registrable and provide information required to be included on the register.

Failure of a company to take reasonable steps and refusal by the registrable person or RRLE to provide required information is a criminal offence. The company must also keep the register up to date, and failure to do so is also a criminal offence.

What information must be held on the register?

Where the PSC is an individual, the following information must be provided:

  • name
  • a service address
  • the country or state (or part of the United Kingdom) in which the individual is usually resident
    nationality
  • date of birth
  • usual residential address
  • the date on which the individual became a registrable person in relation to the company in question (i.e. for existing companies, 6th April 2016)
  • the nature of his or her control over that company
  • any restrictions on using or disclosing any of the individual’s PSC particulars that are in force

Where the PSC is a RRLE the following information is required:

  • corporate or firm name
  • registered or principal office
  • the legal form of the entity and the law by which it is governed
  • if applicable, the register of companies in which it is entered (including details of the state) and its registration number in that register
  • the date on which it became a RRLE (i.e. for existing companies, 6th April 2016)
  • the nature of its control over that company

If a company does not have any PSC’s (provided they have taken all reasonable steps to confirm this is the case), the company must also record this fact on the register. The PSC register must be kept available for public inspection along with other statutory registers, and be kept up to date.

Filing at Companies House

If the company was incorporated before 30 June 2016, the company will need to provide the PSC information in their first confirmation statement to be filed at Companies House and be updated annually via the confirmation statement.

For companies incorporated after 30 June 2016, the company will be required to complete a statement of initial control to confirm its PSC information with Companies House as part of the incorporation process and this must be updated annually via the confirmation statement.

A PSC can apply to have certain or all information withheld from the register, however this protection will only be granted in limited circumstances. As with directors, a PSC’s residential address will not appear on the register, unless they are listed as the service address.

For further information or guidance please contact a member of the Corporate team at CFR.