Since April 2016, UK companies have been required to create and maintain a list of ''people with significant control'' (PSC) within their company. Companies must then file these lists with the Companies House. Details of the Small Business, Enterprise Employment Act 2015 changed the prevailing laws within the Companies Act 2006 in hopes of increasing transparency over the ownership and control of UK companies and LLPs. Other business structures regulated under this provision include Societas Europaea (se) and eligible Scottish partnerships (SLP).
While requiring this kind of record-keeping may seem like a simple request, the laws governing who - or what - qualifies as a PSC are, nonetheless, complex. Everything you need to know about PSC and the implications for your business structure are covered in the 11 questions below.
1) What is the intention of the PSC Register?
The PSC Register is intended to provide more complete transparency as to the direct and indirect ownership of UK companies. This move was made as an attempt to combat corruption, tax evasion and financing of terrorism.
2) Who qualifies as a PSC?
A PSC is an individual who meets one or more of the following conditions:
- Directly or indirectly owns more than 25 percent of the company's shares
- Directly or indirectly holds more than 25 percent of the company's voting rights
- Directly or indirectly has the right to appoint or remove the majority of the company's directors
- Has the right to or actually exercises significant influence or control
- Has the right to or actually exercises significant control over a trust or company that meets any of the other four conditions
- Name of individual
- A service address for the individual
- The country, state or part of the UK in which the individual claims residency
- Nationality
- Date of birth
- Usual residential address of individual
- Date upon which the individual met conditions to become PSC and the nature of their control
- Name of the legal entity
- Registered or principal office address
- The form of legal entity
- The law by which the entity is governed
- The names and registration numbers of companies for which it claims significant control
- The date when it met the requirements to be a RLE
- Reviewing your register of members, articles of association and statement of capital to ascertain whether any individual holds more than 25% of shares
- Reviewing your register of shareholders and articles of association to ascertain whether any individual has 25% voting rights
- Reviewing provisions in the articles of association or any other covenants or agreements concerning the appointment or removal of directors
- Considering whether any individual who does not meet one or more of the above conditions nonetheless has significant influence over the way the company is run
- Considering whether there is a trust, firm or other legal entity that would meet one or more of the four stated conditions if it were a person
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