As of 6th April this year, the main provisions of the Small Business, Enterprise and Employment Act 2015 (the Act) which affect the daily administration of a company begin to come into effect.
These new provisions, whilst on the surface appearing innocuous, will have a significant impact on everything from a company’s records (both what it is required to keep and what it is required to publish and/or deliver to Companies House) to the make-up of its board of directors (including who can be a director).
The changes made by the Act are intended to be rolled out between April and October 2016. However, for the purpose of this briefing, we consider only those provisions which came into effect on the 6th April, namely the requirement to maintain a register of persons with significant control, or as it is more commonly referred to, the “PSC Register”.
The PSC Register
From 6th April 2016, every company in England and Wales will have to keep an up to date PSC Register.
The register is billed as the first step in the Government’s plans to make UK companies more transparent.
What is it?
The PSC Register is a new statutory register which a company will be required to keep with its company books.
The purpose of the register is to ensure that a company knows and can confirm who exerts significant control over it.
What is “significant control”?
The Act contains numerous examples as to what constitutes significant control or influence. However, the most common of these are:
- a person holds (directly or indirectly) 25% or more of the Company’s shares;
- a person holds (directly or indirectly) 25% or more of the voting rights in the Company; or
- a person who has the right (directly or indirectly) to appoint or remove a majority of the company’s board of directors.
What information must appear on the PSC Register?
The register should contain a number of details for any person who has significant control and is a registerable person.
The details required to be maintained (known as the “prescribed particulars”) will depend based on whether the registerable person is an individual, a company, a partnership or other similar entity. However, the common details are as follows:
- Full Name
- Service Address
- Residential Address (if different)
- Details of the date and nature of that person’s control
Is the PSC Register available to the public?
As is the case with the company’s other statutory registers, the PSC Register must be made available for inspection by the public.
Are there any other obligations?
In keeping with the Government’s drive for transparency, the Act imposes a number of additional obligations on a company to ensure it is proactive in maintaining its PSC Register. These obligations include:
- On a regular basis, actively investigating and obtaining information of those persons who have significant control.
- Notifying Companies House of those registerable persons with significant control on both the occurrence of a person obtaining significant control and at least once a year.
What if the company does not comply with its obligations?
The Act makes it an offence for a company not to maintain the PSC Register or comply with its additional obligations.
The offence (if committed):
applies to both the company and each of its officers (directors etc) at that time; and
is punishable by imprisonment and/or a fine.
If you would like further information on:
- the PSC Register; and/or
- how we can assist you or your business,
please contact Paul Hughes (Partner and Head of Corporate) by telephone on 0191 281 6151 or by email phughes@mincoffs.co.uk or alternatively contact John Nicholson (Partner in Mincoffs Corporate Department) by telephone on 0191 281 6151 or by email jnicholson@mincoffs.co.uk.
