With the purpose of increasing transparency around who owns and controls business entities, from 6th April this year, companies and limited liability partnerships (“LLPs”) are obliged to begin to keep a register of persons that have significant control (“PSC”) over them – referred to as the “PSC Register”. This register is to be made available for inspection by any person and without charge.

Details of the person with significant control over business entities are to be identified and their information confirmed and recorded in the company’s own PSC register. This information is then provided on the Annual Return (or after 30 June 2016, the Annual Confirmation Statement). Those updating the registers must proceed with caution as the registers must contain certain prescribed statements and must not be blank.

Whilst the legislation requires the PSC to provide the company with information about themselves (and the nature and extent of their ability to control). Depending on the circumstances, it may be difficult to ascertain such persons without great effort.

There is a duty on the company/LLP to inform a PSC if indeed he or she is one. Anneka Traynor, Corporate & Commercial expert at KBL says “The task can be time consuming, but worth giving attention to, given the seriousness of the penalty (failure to comply with the regulations is a criminal offence for both the company and the person with significant control). If that isn’t sufficient incentive, this may well be – companies have the power to impose restrictions on shares or rights held by the recipient, should a PSC fail to comply with a request for information, following its issue of a warning and restrictions notice, companies can even apply to court for an order for sale of the shares!”

The following are some examples of persons who would/would not be regarded as PSC’s:

• A father and son, each holding 1 share in a company – their percentage split would be 50% each and so with more than 25% held – they would each need to be registered as PSC’s despite already being registered as members.
• A solicitor holding 100% of the shares in a company as nominee for his client – he has signed a bare trust deed conferring all control on his client. As such, he is not a person with significant control but would still need to be registered in the register of shareholders.

The effect is that details of persons exercising control and influence over the Company can no longer hide from the public eye behind trust and nominee arrangements.