From 30th June 2016 UK companies and Limited Liability Partnerships (LLPs) were required to declare the individuals or entities who had the right to exercise significant control over them. These individuals or entities are known as Persons with Significant Control (PSCs). Danielle Austin, explains more.
A PSC is an individual or entity who holds more than 25% of shares or voting rights, has the right to appoint or remove the majority of the board of directors or otherwise can exercise significant influence or control over the company or LLP.
PSCs were introduced to allow corporate transparency and see who has the right to exercise influence or control over a company or LLP as the individuals or entities who are classed as PSCs and their nature of their control is available at Companies House for the public to access and view.
Prior to 26th June 2017 companies and LLPs were required to update their internal PSC register and notify Companies House of any PSCs when filing its annual confirmation statement.
On 26th June 2017 further changes to the rules on PSC filings were introduced by The Information about People with Significant Control (Amendment) Regulations 2017 to comply with the implementation of the EU’s Fourth Money Laundering Directive. Companies and LLPs are still required to update their internal PSC register and notify Companies House however this is no longer done when a company or LLP files its annual confirmation statement.
Under the new rules companies and LLPs now have 14 days to update their PSC register if there has been a change and a further 14 days to notify Companies House of the change using the relevant form. This includes changes of a PSC’s details or following an allotment of shares, a share sale or share transfer where an individual or entity becomes a PSC.
If you fail to update your PSC register or notify Companies House of any changes within the given time frames this may result in criminal liability for a company or LLP and its officers.
Companies and LLPs must therefore be aware of any changes to their ownership structure and ensure such changes are documented and notified to Companies House.