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Published by: Daniella Lloyd

Transparency – Disclosure of Controlling Interests in UK Companies

From 6th April 2016 most UK companies will be required to maintain a statutory register of people with significant control (PSC registers)[1]. This means that where the individuals who control a company are different from those listed on the company’s register of shareholders, details of such individuals will now have to be disclosed.  The ultimate aim of this new piece of law is to achieve greater corporate transparency.

What is a person with significant control (PSC)?

A PSC will meet at least one of the following conditions:

  • directly or indirectly own more than 25% of the shares in the company;
  • directly or indirectly control more than 25% of the voting rights in the company;
  • directly or indirectly have the right to appoint or remove a majority of the directors of the company;
  • exercise or have the right to exercise significant influence or control over the company; or
  • exercise or have the 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.

Duty of a company to seek information and record information

A company must take ‘reasonable steps’ to identify any individuals with significant control over the company and then request certain information from the PSC.

The PSC’s name, service address, nationality, usual residential address, date of birth, the date on which he/she became a registerable person and the nature of his/her control over the company must be recorded on the PSC register.  If there is no PSC to disclose, the PSC register should contain a statement to that effect.

Failure to provide the information

In the event that a PSC does not respond to a request from the company for information, or withholds information, a notice may be issued on that PSC which could place restrictions on their shares or the voting rights of that PSC.

Failure of a company to comply with its obligations to obtain information and maintain the PSC register will be an offence by the company and its officers (which could lead to fines or imprisonment).

Next steps

The PSC register must be put in place and maintained from 6 April 2016 and from 30 June 2016 the registers should be filed at Companies House with its annual confirmation statement (which replaces the annual return).

 

[1]  The requirements are pursuant to a new part 21A which has been inserted into the Companies Act 2006 by the Small Business, Enterprise and Employment Act 2015