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The New Company Register
From 6th April 2016 The Small Business, Enterprise and Employment Act 2015 requires all UK companies and Limited Liability partnerships (LLPs) to maintain a new register. This includes charitable companies but not Public Limited Companies (PLCs). This new register records the details of any person with “significant control” over the company or LLP, known as a PSC register (Persons with Significant Control). The purpose of this reform is to reduce the misuse of companies by criminals, for say money laundering or terrorist activities. It has been developed by legal experts and is part of the government’s policy to increase corporate transparency in line with international practices.
The PSC register will have to identify and record people who have significant control over the company or LLP and will have to contain certain information about them. The information in the register must be kept up to date and will be available for public inspection. This gives interested parties something of a glimpse behind the corporate veil and is designed to prevent criminals using a company as a façade to hide behind. PSCs are under an obligation to advise the company or LLP that they have a controlling interest. Failure to do so or to comply with the new regulations will be an offence.
The burden of compliance is also on companies and LLPs. They are under a duty to take all reasonable steps to identify, investigate and record the individuals who have significant control over the company. This can be done by looking at who holds more than 25% of the nominal value of the issued shares, who holds more than 25% of the voting rights and who has the right to exert significant control over the company and the board. This is an ongoing obligation which will clearly have an administrative impact particularly for companies with a complicated structure. The new register will need to be kept from 6th April 2016 and be filed at Companies house from 30th June 2016 onward.
To discuss The New Company Register, or any other commercial law matter, please contact Shelley Bonney by email firstname.lastname@example.org or call 01452 411601.
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