From 6 April 2016 all companies are required to draw up and maintain a “PSC register” (Persons with Significant Influence or Control).
Transparency of company ownership is of great importance because “companies can be used to facilitate the conduct of illicit activities – from money laundering to tax evasion, corruption to terrorist financing. Greater transparency of company ownership and control will help us to deter and disrupt the misuse of companies, and identify and sanction those responsible when illegal activity does take place.” Department for Business Innovation and Skills Report – October 2014.
Draft guidance doesn’t explicitly define a person of significant influence or control; presumably to allow the courts a level of discretion with which to determine this test.
A company will be considered to operate significant control over a company where one or more specified conditions are met:
Rights to exercise significant influence or control include:
But will not include:
Companies will have to provide an initial statement about any people with significant influence or control;
The PSC register must state the following in relation to each “registrable person”:
A company is entitled to require someone they consider to be a PSC to provide the above information or state why they consider they are not registrable.
Failing to register an individual who is later held to hold significant influence or control could result in criminal penalties for any company or individual who fails to provide information or provided false information.
We are still awaiting the form and content of the PSC register and will post this when available. In the meantime businesses should undertake a thorough review of individuals within their business who meet the above criteria.
For further help and advice, please contact me on 02380 482117.