Persons with Significant Control Regime - Are you Compliant?

We are approaching six months into the new "Persons with Significant Control Regime" (which came into force on 6 April earlier this year) so now is an appropriate time to consider whether your company has got to grips with, and is complying with, the regime.  If your "Confirmation Statement" (the new term for the Annual Return) has not been due for filing since 6 April, you will be required, when it is due for filing, to also file your Register of Persons with Significant Control (a PSC) as part of the Confirmation Statement. 

The purpose of the new PSC regime is to try and give greater transparency as to any individuals (or relevant legal entities) who exert significant control over a company (even if they were not shown at Companies House as directors and/or shareholder).  All companies are now required to take reasonable steps to identify those individuals and relevant legal entities that hold significant control over their affairs. 

Guidance as to what amounts to significant control is given by way of reference to five separate measures known as the "Special Conditions".  In summary, the Special Conditions are if an individual directly or indirectly holds 25% of the shares in the Company, holds 25% of the voting rights, has the ability to appoint or remove the majority of directors, or the right to exercise significant influence or control over another entity which, in turn, meets one of the other Special Conditions in relation to your company.

Your statutory registers should now also contain a register of PSCs; failure to do so may constitute an offence by the company and every officer of the company.  This register should contain details of all PSCs and must be kept up to date.  The register will also state which of the Special Conditions are met; it is possible that a PSC will meet one or more of the Conditions and this must be reflected in the register.  Note also that a company's PSC register must never be empty. Details of any PSCs must be completed, if there are no PSCs then this should be stated, and if you are in the process of identifying whether or not there are any PSCs then this should also be stated in the register.

If you have any queries in relation to the new PSC regime and obligations placed upon all companies by it please do not hesitate to contact John Flanagan, a partner in our Corporate Department who specialises in corporate governance.

Posted on: 03/10/2016

This article is for general guidance only. It provides useful information in a concise form. Action should not be taken without obtaining specific legal advice.

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