31 March 2016

When the Small Business Enterprise and Employment Act 2015 (the “Act”) received Royal Assent on 26 March 2015, it brought with it some significant changes to company law, the most notable of which are soon to come into force.

The Register of People with Significant Control

With the aim of increasing transparency in private companies, as of 6 April 2016, UK companies (with the exception of UK companies with shares trading on a regulated or prescribed market (including the LSE Main Market and AIM)), will be required to keep a register of people with ‘significant control’ over the company (the “PSC Register”).

The PSC Register will be separate to a company’s register of members and will be publicly available. In addition, as of 30 June 2016, the PSC Register will need to be included as part of the company’s confirmation statement (which replaces the annual return from this date) at Companies House.

Considered to be one of the most controversial changes introduced the Act, the aim of the PSC Register is to make individuals with significant beneficial interest or other controlling powers in a company easily identifiable.

The Act includes detailed provision to help ascertain who is a Person of Significant Control (“PSC”) and the Government has issued additional guidance to explain what companies must to do identify and register the PSCs of their company. In general, a person is a PSC if he, she or it (alone or jointly with others) owns or controls more than 25% of the company or who otherwise has the ability to exercise significant influence or control over the company.

The details to be included on the PSC Register vary depending on which category the PSC falls into (for example, individual or relevant legal entities), however all entries must state the date on which the PSC became a person with significant interest and the nature of his/her/its control.

Not only does the Act place an obligation on the company to maintain a PSC Register, it also imposes a duty on the relevant person or legal entity to notify the company of their status as well as any changes to their details. Both companies and individuals may face criminal penalties for failure to provide, or for deliberately providing false, information.

Whilst the Act does not extend to limited liability partnership (“LLPs”), under the draft Limited Liability Partnerships (Register of Persons with Significant Control) Regulations 2016, LLPs will also be required to keep a PSC Register from 6 April 2016.

The Confirmation Statement

From 30 June 2016, the annual return will be replaced with a confirmation statement to be filed at Companies House. There will be no filing date for the confirmation statement but rather just a requirement that one is filed at least every 12 months. The statement will cover similar information about the company as the annual return currently does but will also include details of the companies PSC register.

For more information on the PSC Register and in particular, for assistance in identifying who and what needs to be on it, or for further details on the new confirmation statement, please contact Jeremy Glen, Partner jsg@bto.co.uk T: 0141 221 8012.