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Full guidance on UK company 'significant control' register

Thursday, 18 February, 2016

The UK government has published detailed non-statutory guidance for companies and trusts on how to comply with the new register of persons with significant control (PSC).

The register is effectively a compulsory listing of the beneficial ownership of almost all British companies, Societates Europaeae and limited liability partnerships. From 6 April they must begin maintaining a PSC register at the company's registered offices, available for inspection by the public at a fee of GBP12. This register must be filed at Companies House by 30 June, and updated every year. This filing, again open to public inspection, replaces the annual returns previously submitted to Companies House.

The new guidance defines PSC as an individual who either holds more than 25 per cent of the shares or voting rights, or the right to appoint or remove a majority of directors, or 'otherwise having the right to exercise, or actually exercising, significant influence or control'.

Trusts

The guidance states:

'If an individual has significant influence or control over the activities of a trust or firm, which would be a PSC of the company if it were an individual, then you should enter that person's details on the PSC register. If a registrable relevant legal entity (RLE) controls the trust or firm then its details must be entered on the PSC register. If a legal entity which is not an RLE controls the trust or firm, then you should continue to explore the ownership chain until you have identified an individual or registrable RLE with majority ownership of that legal entity, or are confident none exists. [...] If someone other than the trustees, such as the settlor or beneficiary of the trust, or partners has the right to exercise significant influence or control over the trust or firm, then they would also be shown on the register [...].'

Consequences for PSC who fail to supply necessary information

The guidance also indicates the actions available to a company when an individual thought to have 'significant control' does not cooperate in providing the necessary information. One 'reasonable' measure is to apply restrictions to the individual's shares or rights, but the guidance says this step can only be taken when there has been repeated failure by that person to respond. 'Your company is not required by law to impose restrictions in these circumstances, but you must seriously consider it as part of meeting your legal requirements to take reasonable steps.'

The document is 86 pages long and necessarily covers many complex issues, but will be required reading for trustees and company directors over the next four months.

Sources