From today the PSC Regime requirements become law – are you complying?

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The PSC Regime requirements have become law, and to help you start the process of identifying whether or not you have any ‘persons with significant control’ (or PSC’s ) this helpful Companies House video will give you a good starting point:

 

 

A more detailed summary of the ‘qualifying conditions’ are set out below, but if you have any PSC’s then you have to:

  1. contact those people to obtain and confirm the relevant information;
  2. register that information on your own PSC Register;
  3. file the information at Companies House; and
  4. monitor the information and update the PSC Register when any changes occur.

If you need any help or advice on anything to do with PSC registration please contact us or telephone 07495 583936.

How do you identify a PSC?

A PSC is an individual who meets one or more of the following conditions:

  • directly or indirectly owning more than 25% of the shares
  • directly or indirectly holding more than 25% of the voting rights
  • directly or indirectly holding the right to appoint or remove the majority of the directors;
  • otherwise having the right to exercise, or actually exercising, significant influence or control; or
  • holding the right to exercise, or actually exercising, significant influence or control over the activities of a trust or firm (which is not a legal entity – so a general partnership or a limited partnership but not a Scottish partnership or limited partnership) which would itself satisfy one of the first four conditions if that trust or firm was an individual.

A simple example may explain it more clearly:

identify-a-psc

  1. Person 1 and Person 2 are both PSCs of Company A: they each hold more than 25% of the shares in Company A and each satisfy condition 1. Assuming one vote per share, each of Person 1 and Person 2 also satisfy condition 2 as they each hold more than 25% of the voting rights in Company A.
  2. Person 3 does not hold sufficient shares or voting rights to satisfy condition 1 or condition 2. Assuming there no other arrangements which give Person 3 significant influence or control over Company A (which may lead to Person 3 satisfying condition 3 or condition 4), Person 3 is not a PSC in relation to Company A.
  3. Company A’s PSC Register would contain details of each of Person 1 and Person 2, noting that they each meet condition 1 and condition 2.

A PSC is, by definition, an individual and not a legal entity such as a company or an LLP. Where a company is owned or controlled by a legal entity, not an individual, that legal entity must be put on the company’s PSC register if it is both relevant and registrable, something we shall be looking at in our next article on the new PSC Regime.

In the meantime however… How do you record information in a PSC Register?

Your starting point is that a PSC Register must never be empty! Once the company has all confirmed information in relation to a PSC, the required particulars must be entered in the PSC Register, and every entry must have a date.

For individual PSCs, the required particulars are broadly the same as those required for individual directors, and will include name, service address, nationality, date of birth etc. In each case, the nature of the PSC’s control over the company must be stated by reference to which one (or more) of the five specified conditions it meets. Note that where condition 1 or 2 applies the nature of the interest must be quantified according to pre-set percentage bands (ie over 25% up to 50%; over 50% but less than 75%; and 75% or more).

Also remember to update and monitor your PSC information.

The company must ensure that the information in its own PSC Register is kept up to date, and failure to do so is a criminal offence. The company must update its own PSC register when it has been informed of a change; it has all of the information it needs to enter in its own PSC register; and that information has been ‘confirmed’ if it relates to an individual PSC.

Remember, a company cannot enter incomplete information, or unconfirmed information relating to an individual PSC, in its register!

Finally, don’t forget that the obligation to file PSC information at Companies House comes into force on 30th June 2016.

If you need any help or advice on anything to do with PSC registration please contact us or telephone 07495 583936.