Register of People with Significant Control
From 6 April 2016 a new requirement was put in place for all Companies to maintain a Register of People with Significant Control(PSC). This requirement extends to all charitable companies, social enterprises structured as companies and trading subsidiaries. From June 2016 this register must be filed alongside a confirmation statement (which is replacing the Companies House annual return) and will be on public record.
The new rules aim to increase transparency of corporate structures and the purpose of the register is to list individuals with significant control over the company and/or relevant legal entities (RLEs) with significant control. There are five tests of ‘significant control’ and a person has significant control if they meet any one of the following requirements:-
- owns more than 25% of the shares directly or indirectly;
- holds more than 25% of the voting rights directly or indirectly;
- has the power to appoint or remove the majority of the board;
- has the right to exercise or actually exercises significant influence or control over the company; or
- has the right to exercise or actually exercises significant influence or control over a trust or firm that is not a legal entity which itself satisfies any of the first four conditions.
The Department for Business Innovation & Skills (BIS) has issued guidance to help companies understand the new regime, to view this guidance please click here.
If the company does not have any PSCs, you just need to make an entry to that effect in the PSC register and the annual confirmation statement. Below are some examples of circumstances where something more significant is likely to be entered on the PSC register:-
- The company has less than four members (all members will be PSCs)
- An individual or company significantly influences/controls the charity’s decisions or the identity of board members
- Group structures including subsidiaries
Charitable companies and trading subsidiaries must consider whether they have any PSCs carefully and ensure they have the appropriate procedures in place to maintain the PSC register.
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