Do you know who ultimately owns or controls each company in your group?

Do you know who ultimately owns or controls each company in your group?

From 6 April 2016 all UK incorporated companies and LLPs* are required, by law, to have a dedicated statutory register detailing those persons who own or control them.
The register must identify each individual or legal entity that exercises control or significant influence (known as a person with significant control or “PSC”), including direct or indirect control of 25% or more of the voting rights in the company.

If you are not sure, you need to start taking “reasonable steps” to find out.
This will include referring to the register of members, the articles of association, the statement of capital, any shareholders’ agreement and any voting patterns or arrangements.  Investigation notices should be sent to persons you believe to be PSCs (or to persons you believe might have information about a PSC). 

Every UK company and LLP in your group* must keep a register.
Even if the register has no PSCs to list on it.

Wholly owned subsidiary companies must list their immediate parent company (known for these purposes as a relevant legal entity) instead of the ultimate individual PSC where that parent company holds its own PSC register.
A subsidiary company’s register must also list its parent company (not the PSC) where that parent company’s shares are listed on a public market.

Complex or unusual shareholding or group structures will require particular attention to ensure the correct PSCs or relevant legal entities are listed on each company’s register.
For example, groups which include overseas entities and any company which has joint share interests or agreements, nominee arrangements, or trustee shareholders.

Individuals who are PSCs must notify the company and provide their details to it.
It is a criminal offence for an individual not to comply.

From 30 June 2016 each company’s PSC register must be filed at Companies House and will be publicly available.
Companies must maintain their register and update the Companies House record annually.

* Overseas entities, companies subject to Chapter 5 of the FCA’s Disclosure and Transparency Rules, companies with voting shares admitted to trading on a regulated market in the UK or EEA or on specified markets in Switzerland, Japan, the USA and Israel and limited partnerships are excluded from the requirement.

Companies should start planning now for the requirement to keep a PSC register from 6 April 2016. 

If you would like to speak to someone to discuss how the PSC regime will apply to your company or group, please contact James Waddell or your usual contact in the Corporate team.

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