03 March 2016
From 6th April 2016 the provisions of Part 21A of the Companies Act 2006 (as was inserted by the Small Business Enterprise and Employment Act 2015), the Register of People with Significant Control Regulations 2016, and the Limited Liability Partnerships (Register of People with Significant Control) Regulations 2016 will all take effect.
These regulations usher in some quite significant changes to the filing requirements of and the registers held by limited companies and LLPs, and are intended to demonstrate the Government's commitment to transparency in business.
From 6th April 2016, all limited companies and limited liability partnerships (LLPs) must begin to keep a register of all of their "people with significant control".
From 30th June 2016, all companies and LLPs must deliver this information to Companies House as part of the new "confirmation statement" (which will at that time replace the annual return), where it will become part of the publicly available records.
Furthermore, from 30th June 2016, any applications to incorporate a new limited company or LLP must include this information.
Any limited company or LLP must take reasonable steps to determine whether there are people who have significant control over the company (or LLP). They must contact that person - or anyone that they believe might be such a person - to confirm whether that person meets one or more of the conditions which are used to define whether they are a "person with significant control" (henceforth, a "PSC") in accordance with the regulations.
A PSC is an individual who meets one or more of the following conditions in relation to the company or LLP:
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directly or indirectly owning more than 25% of the shares;
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directly or indirectly holding more than 25% of the voting rights;
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directly or indirectly holding the right to appoint or remove the majority of directors;
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otherwise having the right to exercise, or actually exercising, significant influence or control over the company (or LLP);
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holding the right to exercise, or actually exercising, significant influence or control over the activities of a trust or a firm which is not a legal entity, but would itself satisfy any of the first four conditions if it were an individual.
Whilst the first three conditions are quite straightforward, the last two are a little more open to interpretation.
Furthermore, whilst a PSC is an individual, the regulations also provide for a "relevant legal entity" (henceforth, a "RLE") to be recorded instead.
A RLE is relevant if it meets any of the conditions above, AND it is subject to the Financial Conduct Authority's Disclosure and Transparency Rules, AND it has voting shares admitted to trading on a regulated market in the UK or European Economic Area (or on certain other specified markets further afield).
A RLE is registrable in a company's Register of PSC if it is the first RLE in the company's chain of ownership.
As you can see, the PSC regulations are quite a significant change to companies' filing and recording requirements, and appear quite complex, but you can be assured that we at Bourse are ready to help you!