Persons with Significant Control Regime – Protecting Information

The Persons with Significant Control regime came into effect on 6th April 2016 so that from this date UK companies , Societates Europaeae (public companies registered in accordance with the corporate law of the EU), and limited liability partnerships are required to identify and record people who own or control their company.

A Person with Significant Control (PSC) is an individual who meets one or more of the following criteria:

1. holds more than 25% of the shares in the company;

2. holds more than 25% of the voting rights in the company;

3. holds the right to appoint or remove the majority of the board of directors of the company;

4. has the right to exercise, or actually exercises, significant influence or control over the company;

5. where a trust or firm who would satisfy conditions 1-4 if it were an individual;

6. any individual holding the right to exercise, or actually exercising, significant influence or control over the activities of that trust or firm.

Purpose of the PSC regime

The aim of the PSC regime is to increase transparency over who owns and/or controls companies. It will also inform investors and support law enforcement agencies when carrying out money laundering investigations.

What does a company need to do?

1. Identify PSCs over their company.

2. Confirm the PSC’s information.

3. Record the PSC’s information in a PSC register.

4. Provide the current PSC information to Companies House as part of its annual confirmation statement.

5. Update the information recorded on the register as it changes.

Transparency – PSC Information

Companies need to make their PSC register accessible at their registered office or at another location notified to Companies House. From 30th June 2016, companies can elect to maintain their register on a central public register only (at Companies House).

Whether the company elects to keep its register at the registered office or at Companies House, the information on the PSC register will be publicly available as, with effect from 30th June 2016, companies have to file a confirmation statement which replaces the obligation to file an annual return.

Suppressing information from public disclosure

Under the Companies Act 2006, a director is able to suppress his residential address by providing a service address. In this event, the director’s residential address is kept on a secure register to which access is restricted to certain public authorities and credit reference agencies (CRAs). Where a director considers himself/family members to be at risk of violence or intimidation, he can apply for his residential address to be protected from disclosure to CRAs.

Further, in “exceptional circumstances” a PSC (or a company on its behalf) can apply to prevent:

1. the PSC’s residential address from being shared with CRAs; or

2. all information relating to the PSC being made public .

“exceptional circumstances” means where there is a serious risk of violence or intimidation.

An application for restricting or suppressing information may be appropriate if the PSC is connected to a company which is licensed under the Animal (Scientific Procedures) Act 1986; active in the defence industry; is a supplier to, or is in partnership with, these organisations; or has been targeted by activists.

An application can be made by the PSC, or on his behalf by the company, and protection will be granted if the application includes evidence of a serious risk of violence or intimidation to the PSC or someone who lives with the PSC.

The case for a protection application depends on whether the PSC is applying to prevent his residential address from being shared with CRAs or suppressing all PSC information.

Making the application

A PSC can apply for protection before he becomes a PSC or before the company is incorporated. Protection starts as soon as the application is registered at Companies House. The company must not use or disclose the PSC’s information on its register from the time the application is made.

Companies House will assess the application and confirm the outcome. If the application is refused, the PSC can appeal within 42 days. Protection continues during the appeal process.

Once granted, protection lasts indefinitely.

Guidance

Further guidance can be found by visiting the Companies House website or the Department for Business Innovation and Skills website.

In particular:

Chapter 4 and Annex 1 of the Guidance for People with Significant Control over Companies, Societates Europaeae and Limited Liability Partnerships published by the Department for Business Innovation and Skills

https://www.gov.uk/government/uploads/system/uploads/attachmentdata/file/515721/Guidancefor_PSCv2.pdf