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.

There are positive obligations on businesses to ensure that their records are correct. Companies cannot simply turn a blind eye to beneficial owners or complex group structures and they may even be required to carry out a formal investigation procedure to obtain the information needed.

The most recent changes mean that an additional number of businesses (including certain traded companies) are now subject to the PSC regime (but may have a transitional period to comply with it). The developments also intend to bring the regime in line with the Fourth Money Laundering Directive in attempt to further increase transparency by making sure that company records are contemporary and consistent, as highlighted further below.

As an overview, the updated regime now places an obligation on companies to maintain and update their register in a relatively short timeframe when changes occur. Previously a company simply maintained and updated their own hard copy registers and annually notified Companies House of any changes in its confirmation statement.

From 26th June 2017, however, companies are obliged to update their hard copy PSC register within 14 days of any changes and notify Companies House within a further 14 days of making the entry on their register. Therefore, there is a maximum of 28 days to publicly disclose changes to beneficial ownership to Companies House. This can be done by electronic filing or using the hardcopy forms PSC01 to PSC09.

There is still a requirement to submit an annual confirmation statement but this will now not contain any details of PSCs.

If a company is required to investigate (for example because it has reasonable cause to believe that a change has happened) then it must give a notice which seeks confirmation. The time limit for doing so is now also 14 days.

If you have any queries about whether and how the PSC regime affects you or you would like any advice on maintaining and updating PSC information then our Corporate and Commercial department will be able to assist you.

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