Out-Law Guide | 24 Feb 2016 | 12:29 pm | 4 min. read
This guide was last updated in February 2016
Introduced by the 2015 Small Business, Enterprise and Employment Act and supplemented by regulations and guidance, the PSC register is a register of individuals and legal entities that have significant control over a company. It is designed to ensure that those that are the ultimate owners or controllers of a company are identified with details of their interests made public; and to deter and impose sanctions on those that hide their interests.
The PSC register was developed in line with the proposal made by the UK at the 2013 G8 summit to increase the transparency surrounding the ownership of companies. The EU has adopted similar measures via the Fourth Money Laundering Directive, which must be implemented by all member states by 26 June 2017.
Who needs to maintain a PSC register?
The obligation to maintain a PSC register applies to all UK companies, including dormant companies, and LLPs with some exceptions:
There are criminal penalties for companies and their officers for non-compliance.
Where do I start?
You are required to take reasonable steps to find out whether there are people that have significant control or influence over the company. Non-exclusive examples of reasonable steps are set out in draft statutory guidance (14-page / 838KB PDF) and include reviewing the register of members, articles of association and any shareholder agreements. You must then contact these people, or others who might know them, to confirm that they meet one or more of the criteria and to obtain the relevant information to go on the PSC register.
The information on your PSC register will need to be filed at Companies House on or after 30 June 2016 when filing the company's confirmation statement - the replacement for the annual return. The information on the PSC register must be kept up to date.
Your PSC register must be kept either at the company's registered office; or at another location which the company has notified to Companies House.
Who is a person with significant control?
A PSC is an individual who meets one or more of the following conditions:
Both the Small Business, Enterprise and Employment Act and the accompanying regulations contain detailed provisions relating to the interpretation of these conditions. The government has also published draft statutory guidance on the meaning of significant influence or control.
What about corporate shareholders?
If the company is owned by a legal entity and not an individual, your PSC register may need to include that legal entity if it is both relevant and registrable.
A relevant legal entity (RLE) is one which:
An RLE is registrable in relation to a company if it is the first relevant legal entity in the company's ownership chain. If the legal entity in question is not a registrable and relevant legal entity, it will not appear on the PSC register and the company will need to look further up the chain of ownership to identify any registrable PSC.
What information needs to be included?
Once a PSC has been identified, you must obtain and then confirm the following details about that individual on the PSC register:
Only confirmed information on individual PSCs should be entered on the register. Information is treated as confirmed if:
What if I can't find information to determine who the PSCs are?
The company is entitled to serve notice on anyone it believes has information that will help identify a PSC or relevant legal entity. Notices require the addressee to respond within a month. If they fail to do so, they commit a criminal offence. If they fail to respond to an additional notice, you can impose restrictions on shares.
While investigations remain ongoing, you must enter this fact and the stage that you have reached on the PSC register.
What if there are no PSCs?
The requirement to maintain a statutory PSC register applies whether the company has PSCs or not. If reasonable steps have been taken to identify the existence of a PSC, and the company is comfortable there are no individuals or legal entities which qualify as such, this fact must be noted on the PSC register.
According to the guidance, the register must say: "The company knows or has reasonable cause to believe that there is no registrable person or registrable relevant legal entity in relation to the company".
Can I leave the PSC register blank if I don't have the relevant information?
You must not leave the register blank. The guidance sets out the official wording which must be entered both on the company’s own PSC register and when filing information on the central public register at Companies House. This wording is in addition to the relevant information entered on the register.