Ahead of a new regime coming into force tomorrow, which will require most UK companies to keep a new register disclosing any individuals with "significant influence or control" over them, Legal Director in Mishcon de Reya's Corporate department, Kate Higgins, commented:
"Aimed at increasing transparency in UK companies, the regime is designed to make public the individuals who really control a UK company, whether in practice or pursuant to rights. For example, any individual holding significant shareholdings of over 25% - whether directly, behind certain types of trust, or other corporate entities or structures in the UK or abroad - or exercising other means of significant influence or control, may all be required to be registered on the new "People with Significant Control" (PSC) Registers. Criminal offences attach to companies and their officers who fail to comply with obligations to maintain a register and identify their PSCs. The PSCs themselves can also commit offences and may in some circumstances also lose rights attaching to their interests if they fail to comply.
"Yet with final implementing legislation and guidance only recently becoming available, many companies are having to put in place registers at the last minute. With over 2.7 million UK registered private companies - according to BIS statistics published in the July 2013 consultation which led to reform - many will not yet have started taking advice on the new regime. The legislation is complex and in some cases, a quite detailed analysis and/or investigation by the company may be required in order to identify who is a PSC. In a group situation, an analysis will also have to be done to identify any other company higher in the chain which must be registered instead of the individual PSC. This is because that entity is subject to its own equivalent disclosure requirements and so its PSC register can be checked. However, even companies with a simple ownership structure will be required to keep a register and need to follow specific rules on how to confirm relevant information with their PSCs and to identify the appropriate prescribed wording to include in the register. A company must also keep a register even where no individual qualifies as a PSC.
"From 30 June, companies will also need to file the information with the UK Registrar of Companies with their first "confirmation statement". This will replace the company's "annual return" and will make available on a central and publicly searchable register, the information that the company has recorded on its own PSC register. The regime does not apply to certain listed companies who are subject to separate disclosure requirements."