People with significant control over a company

A new requirement for companies to keep a register of people with significant control over the company, or PSC register, came into force today. The requirement applies to all unlisted companies, limited liability partnerships and Societates Europaeae registered in the UK.

With effect from 6 April 2016, an unlisted company must take reasonable steps to find out if there is a person or company that has significant control over the company and, if so, to identify them. A person has significant control over a company if they have more than 25% of the company’s shares or voting rights or exercise significant influence or control over the company in some other way.

The company should compile its PSC register by giving notice, using official wording provided in government guidance, to anyone whom it knows or has reasonable cause to believe to be a registrable person, requiring them to confirm the particulars required for the register within one month.

Once the person concerned has confirmed their required particulars, the company should enter them in its PSC register, using official wording to describe the nature of their control over the company. The company should also register any registrable relevant legal entities (companies or limited liability partnerships registered in the UK, or foreign companies listed on certain overseas exchanges, with significant control over the company exercised directly or via an unlisted foreign company).

Initially, the PSC register may state that the company has not yet completed taking reasonable steps to find out if there is a registrable person or registrable relevant legal entity in relation to the company. If, after investigation, the company believes that there are no registrable persons, then the register should state that fact, using the official wording.

A person or legal entity (including a listed company) with significant control over a company has a duty to notify the company that they are a registrable person or registrable relevant legal entity in relation to the company.

The company and every officer in default commits an offence, punishable by a fine or up to two years’ imprisonment, if they do not take reasonable steps to identify people who have significant control over the company. People with significant control commit an offence if they do not identify themselves to the company or respond to notices from the company.

With effect from 26 June 2017, a company must file any changes to its PSC register at Companies House within 14 days, and confirm that this has been done when submitting its annual confirmation statement. See here for further information about these changes.

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