Even if they have determined that they do not have any PSCs, all companies subject to Part 21A CA 2006 are required to take reasonable steps to determine if they have any people who have significant control (PSCs) over their company. They are also required to keep a PSC register even if they have determined that they do not have any PSCs.
What is the PSC Register?
A registry of People with Significant Control, commonly known as a PSC register, is necessary for UK businesses, Societates Europaeae (SEs), and limited liability partnerships (LLPs). This is in addition to the director's, secretary's, and member's registers, among other things.
The PSC Register, which is necessary to improve transparency for UK-registered corporations, is a list of all people and corporate organisations with substantial control.
It used to be possible to register a UK company with nominee directors and shareholders, keeping the true beneficial owners' information off the public record at Companies House.
The PSC register mandates that all UK-registered enterprises that are subject to the Act retain a list of these hitherto unknown controllers or beneficiaries.
Why was it implemented?
The PSC registry was created to assist investors in analysing business structures as well as law enforcement. To assist with money laundering investigations, as well as to detect and prevent any criminal conduct carried out through UK corporate structures.
Who is required to keep a PSC register?
Unless they fall into one of the following categories, all UK-formed companies are required to keep a PSC register under the Act:
- Businesses with voting shares admitted to trading on a regulated market in the United Kingdom;
- Companies with voting shares admitted to trading on a regulated market in the European Economic Area or on specific markets in Switzerland, the United States, Japan, and Israel.
Even if they have determined that they do not have any PSCs, companies that fall under Part 21A CA 2006 are required to take reasonable steps to determine if there are people who have significant control (PSCs) over their company. They are also required to keep a PSC register even if they have determined that they do not have any PSCs.
Who qualifies for it?
You must determine if there are any persons within your company who possess significant control or a registrable Relevant Legal Entity for the firm, depending on the size and structure of your company.
If they fit one or more of the following criteria:
- They have the authority to nominate or dismiss a majority of the company's board of directors;
- They have the authority to exert considerable influence or control over a trust or a business that is not a legal organisation;
- They have the legal right to exert considerable influence or control over the firm, as well as the ability to do so;
- They own more than a quarter (25%) of the company's stock;
- They control more than a quarter (25%) of the company's voting power.
Once you've determined that there are persons who would qualify for inclusion on your PSC register, you can begin the process of adding them. Most of the time, these people's identities will be evident.
This might be as easy as forming a tiny business with only two or three owners who all possess equal shares.
Only the two or three shareholders who have been designated as your PSCs will appear on your register in this situation.
Where should the PSC register be kept?
The PSC register of a business must be maintained and available for viewing at its registered office or at an alternate inspection site (if one exists), and it must be open to the public without charge.
Anyone wishing to access or obtain a copy of the PSC register must submit a written request to the corporation, including their name, address, and the reason for their request. The corporation has five working days to respond to the request.
Is it necessary to update the PSC register?
Fines or perhaps jail are the penalties for such offences.
Companies House will contact your firm if you do not comply with your PSC obligations and give you the chance to correct the situation before taking enforcement action.
What happens if a business fails to complete or update a PSC register?
After you have completed all of the essential steps to creating your PSC register, you must ensure that it is kept up to date.
It is a criminal offence for businesses to fail to maintain the information on their PSC registration up to date.
In terms of increased openness, this is a significant step forward that will assist to enhance business confidence and offer tangible advantages to the UK economy as a whole.
Keeping up with new laws and regulations may be tough and intimidating, and we can understand these challenges. With this in mind, Persona Finance has an extensive range of business, accounting, and legal services that are essential for every business to grow. For more information on how we can help your business, please contact Persona Finance at [enquiries@personafinance.co.uk].
