Creating a Register of People with Considerable Control

Owners and directors of registered companies have the crucial task of keeping up with new legislations and requirements being introduced now and then. From April 6, 2016, registered companies have been asked to maintain the PSC register or a record of people with significant control in the company. This is mandatory for all LLPs and companies registered in the United Kingdom.

The register is replacing the annual return. Companies who will be submitting their annual return after June 30, 2016, will have to give the PSC register in place of the annual return. All companies formed recently must submit the PSC register.

What does the PSC register contain?

The register will be a record of influential people within the organization. Their ownership and influence over the company’s business activities will be contained in it. All LLPs and private companies must abide by this new rule. However, it should not be assumed that the register will always contain the names of shareholders, guarantors or LLP members. The people with considerable control may not even figure on the membership list.

The UK government is trying to enhance transparency in corporate companies and creating the register is an essential part of the movement. The disclosure of this detail on the public register is going to improve the level of transparency. The attempt will bring to the fore which people in registered companies are actually in control and thereby help in curbing money laundering and tax evasion activities.

Whose responsibility is it to maintain the PSC register?

The register can be created by the following companies only:

  • Private companies which are limited owing to share
  • Private companies which are limited due to guarantee
  • Limited liability partnerships
  • Societas Europaea

Who can be labeled as a someone possessing significant control

Anyone within the company with or without legal entity can be classified as a person with considerable influence. But there are certain parameters that have to be satisfied to fall into the PSC category.

  • The person should be the holder of 25% or more shares in any private company that is limited by share.
  • Any person with voting rights, of 25% or more in a company
  • If the person can remove or select most of company directors
  • Does and can exercise considerable control over the daily business
  • Can and does exercise a certain amount of control over a firm or trust which cannot be considered a legal entity, but falls within the above mentioned condition in case it is an individual.

The initial three conditions can either be met by an individual, directly, or indirectly by a separate company with shares. The task is comparatively simple in case of a small firm but gets complicated as the company size increases and the number of shareholders rises.

The Companies House lists out certain guidelines which mention the PSC requirements and is especially helpful for companies with complex ownership control.

Information necessary for the register

The company is responsible for collating all information regarding people possessing significant control inside the company. The details, once collected should be cross checked by the every PSC before uploading it on to the register. The register should finally be submitted to the Companies House for maintaining records.

In the case of human PSCs, the list of necessary information is as follows:

  • Full Name
  • Date of Birth
  • Office Address
  • Residential Address
  • Nationality
  • The date when the individual became the LLP or company’s PSC
  • The qualifying condition for seeking entry into the register. Also mention the quantity of control: more than 25% and till 50%

Between 50% and 75%

75% and more

In case a company is the PSC, then the set of information required will vary slightly.

  • Registered name
  • Principal office
  • The law which governs the PSC
  • Registered number
  • Company register
  • The date when it became a PSC or LLP
  • The qualifying factors which helped it enter the register along with the quantity of control

How the PSC will be delivered to the Companies House

From June 30, 2016, all registered companies, as well as LLPs, will have to include the register in the initial confirmation statement. All those formed after this date will have to produce the PSC register during the incorporation. Both new and old registered companies will need to confirm the PSC register details along with the annual statement submission.

Public disclosure of the register

The PSC details can be inspected by anyone through the Companies House official website. A copy of the same will also have to be kept at the registered office for public viewing.

All the details pertaining to the PSCs will not be made public like the residential addresses, unless the same address has been provided as the registered address.

How to update the PSC register

Updating the details on the register will be necessary in case a PSC has died, sold away the shares or increased them considerably. The joining of a new director also has to be included in the register. However, the Companies House does not require the information until the following confirmation statement.