From April 2016 all UK companies will be required by law to maintain a register of persons with significant control over the company. This is called the “PSC Register”. From June 2016 an additional return will have to be made at Companies House disclosing the contents of the PSC Register.
Companies will have a duty to investigate and maintain the information in their PSC Register. Failure to comply will be a criminal offence and will result in the company and each of its directors being prosecuted and subjected to a fine.
Who is a person with significant control?
An individual who meets one or more of the following criteria:
1. has direct or indirect ownership of more than 25% of the shares of the company;
2. has direct or indirect control of more than 25% of the voting rights of the company;
3. has a direct or indirect right to appoint or remove a majority of the directors of the company;
4. exercises or has a right to exercise significant influence or control over a company; and/or
5. exercises or has a right to exercise significant influence or control over activities of a trust or firm which itself meets one or more of the first four conditions.
What information should the PSC Register include?
2. Service address;
3. Country or state of usual residence;
5. Date of birth;
6. Usual residential address
7. Date on which individual became a PSC; and
8. Type of control.
What diligence must companies do?
Companies will have to carefully review their current registers, articles of association, shareholders’ agreements, financing agreements and any other documents relating to the company. Companies must enquire of their shareholders whether any shares are held in trust or as nominee and must identify the ultimate beneficial owners of any shares held by offshore trusts and investment companies.
How we can help?
For companies with straightforward capital structures and no agreements potentially triggering control issues, we can put together and maintain the PSC Register for you and make the appropriate filings at Companies House.
For companies with more complex capital structures and/or structured finance / security and option/warrant agreements, we may need to review your structure and documentation.
If you require assistance, please contact us now. Companies House are likely to impose fines automatically for non-compliance.