Important new changes to the People with Significant Control (“PSC”) regime came into effect on 26th June 2017, which impact on corporate record keeping and reporting obligations.
The PSC regime initially came into effect on 6th April 2016 and companies should by now be aware of their requirements to investigate and disclose who their PSCs are.
However, companies may not have realised that their Companies House filing requirements are separate to their obligations to maintain and update a physical PSC register together with their statutory books (which are records required to be kept by law and sometimes retained by accountants or solicitors).
It is possible for a private company to elect simply to maintain a sole PSC register at Companies House. However, unless the company goes through a formal procedure to elect to maintain these records at Companies House, a hard copy register must be maintained and updated.
There are several categories of what constitutes significant control, including but not limited to holding certain amounts of shares, voting rights and a right to appoint a majority of a Board. The government’s current summary of these categories and how companies record details on their PSCs, which small and medium-sized enterprises may find it useful to consider, can be found here. However, businesses with intricate ownership structures and arrangements of control may find the full guidance more appropriate.
PSC requirements aim to provide transparency over the beneficial ownership of certain organisations and prevent parties from concealing their interest in a business through trusts or other structures.