PSC register for limited companies
A new regulation that requires companies to create a ‘Register of People with Significant Control’ (PSC register) comes into force on 6 April 2016.
The changes should not be too strenuous for companies, but it is important that they are aware and fulfil their obligations in line with the new rules.
What is a PSC register?
The PSC register forms part of the reform to UK company law that was introduced in the Small Business, Enterprise and Employment Act 2015.
This act contains a requirement for companies to produce a register containing information on anyone who has ‘significant control’ over the company.
Which companies will need to produce a PSC register?
The measure applies to all private limited companies and limited liability partnerships (LLPs). It does not apply to public limited companies (PLCs) and it doesn’t apply to foreign companies operating in the UK.
What counts as ‘significant control’?
Most commonly a person of significant control (PSC) will be defined as anyone who owns more than a 25% stake in a company.
A PSC can also be someone who holds more than 25% of the voting rights in a company, or someone who holds the right to appoint or remove a majority of the board of directors of a company.
It is up to the company to decide who is a PSC, rather than the individuals themselves. However, if an individual thinks that they qualify as a PSC then they are legally required to notify the company in question.
If the individual fails to disclose this to the company then they risk losing their right to control the company.
For more detailed information about who qualifies as a PSC read the draft guidance from ICSA.
What information do you need to collect?
Once you have identified anyone with significant control over a company you need to need to collect some basic information on the individuals. This will include:
- Date of birth
- Usual residential address
- Nature of control (usually % of shareholdings)
- Date person became a controlling interest in the company
The PSC register needs to be held either at the company's registered office or at Companies House.
If the register is held by the company, then the date of birth can appear in a shortened version. However, if the register is held solely at Companies House then the full date of birth will be shown.
The information on the PSC register should be regularly maintained at the company's registered office and be made available for public inspection.
The company should also seek to update information held by Companies House once every 12 months via a confirmation statement.
Other changes to be aware of
None of the changes associated with the PSC register are that earth shattering, but it is important that companies are aware of them.
Most limited companies will already have information on their directors readily available with Companies House and in a Register of Members.
However, it is important to remember that the PSC register is an addition to, not a replacement for the Register of Members.
One key change will affect limited companies that come under the ‘significant control’ of a trust or firm. In these instances, the PSC register for the limited company must include the names of individuals that have the right to exercise ‘significant control’ over the trust or firm.
Anyone can request a copy of a company’s PSC register, and the company can charge a flat fee of £12 for fulfilling this request (regardless of how many parts are required to be copied).
Limited companies and LLPs should act now to be ready for the impending changes.
If you are a director of a PSC and worried about complying with the new legislation please call Umbrella Accountants Call: 0800 121 6513 or visit www.umbrella.co.uk/contact-us