The clock is ticking for companies to comply with new regulations surrounding transparency of ownership, warns Tayside based solicitors and estate agents Miller Hendry.
From 6th April 2016, unlisted UK companies and LLPs will have to identify those people with significant control over them, and to record their details in a new statutory register. The requirements come under a new law, the Small Business, Enterprise and Employment Act 2015, which is aimed to reduce corporate crime.
The information must be filed on the public register with Companies House from June 2016, as part of the new confirmation process that replaces the annual return.
The aim of the so-called PSC regime – the acronym refers to ‘people with significant control’ – is to make it easier to find out who is controlling a company and so cut corporate crime. It is part of a global initiative to tackle misuse of company structures, and will also tie in with the EU’s Fourth Money Laundering Directive requirements, which require member states to hold a central register showing corporate beneficial ownership.
The PSC register will contain information on individuals who ultimately own or control more than 25% of a company’s shares or voting rights, or who otherwise exercise control over the company and its management. In certain circumstances, it can apply where a trust or firm would satisfy the criteria if it were an individual.
And although compliance will be fairly straightforward for those companies who have simple ownership and control structures, it is more challenging for those with more complex ownership structures, especially if trusts, partnerships or overseas companies are involved.
Alistair Duncan, Head of Commercial at Miller Hendry, commented:
“The guidelines and regulations are still in draft form and we are awaiting further detail on implementation, but the deadline dates are in place and companies need to be focused on working towards the 6th April deadline.
“The task of identifying which individuals should be disclosed is complex and most companies are going to need support to be sure they’ve identified their PSCs and prepared the Register correctly, at least first time around. Companies are used to providing a register of shareholders, but in many cases this new PSC register will look quite different.”
The requirement of the Register of People with Significant Control Regulations 2016 to maintain a PSC register will apply to all UK private and public companies, other than those publicly traded companies which already report under DTR 5, or rule 5 of the Disclosure and Transparency Rules.
The Register must be maintained at the company’s registered office and will be available for public inspection and searchable online via Companies Houses. Failure to comply will be a criminal act.
For further advice or information on commercial law or other legal issues, visit www.millerhendry.co.uk