S.81 of the Small Business, Enterprise and Employment Act 2015 (SBEEA) came into force in April last year and requires UK companies, LLP’s and SE’s to keep and maintain a register of people with significant control (PSC).
The duty to keep the register was introduced to promote transparency and ensure shareholders, who are the ultimate beneficial owners, and controllers are readily identifiable.
A PSC is defined as an individual who owns or controls, directly or indirectly, more than 25% of the shares or voting rights. This means, any individual who can block a special resolution being passed or control the removal or appointment of a director will have to be included on the register.
In addition to this, a PSC may be someone who ‘actually exercises’ control or is of significant influence in the business.
Before registering any individual as a PSC, you will need to know the following information: Name; Date of birth; Nationality; Residential address; Service address; The date the individual became a PSC (for existing companies the 6 April 2016 should be used); and How the individual qualifies as a PSC including the level of their share or voting rights (over 25% up to 50%, more than 50% but less than 75% and 75% or more).
Reasonable steps must be taken to identify PSC’s. Examples of reasonable steps would be to examine the register of members, shareholders’ agreements and any other documents that may identify if an individual holds 25% or more of the businesses’ shares or voting rights.
If an individual does not meet the condition of holding a 25% shareholding or voting rights, it needs to be considered if they significantly influence or control over the company, despite their formal role. Therefore it needs to be considered if there are any shadow or de facto directors which may meet this condition.
The information must be provided to Companies House annually from 30 June as part of its confirmation statement, which will be replacing the annual return from June. This includes if someone ceases to be a PSC.
Appropriate care should be taken when preparing your register of persons with significant control for the first time and our experts are here to guide you through the process and answer any questions that may arise.
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