CORPORATE LAW NEWS 2016
Corporate Law News
NEW REGISTER OF ‘PEOPLE WITH SIGNIFICANT CONTROL’ (PSC)
New legal requirements will come into force on 6 April 2016, requiring all UK companies and Limited Liability Partnerships to create a statutory register of people with ‘significant control’ over the business (PSCs). This information will become publically available from June 2016. Similar rules will be extended across the rest of the EU in June 2017.
The new register is designed to ensure that individuals who ultimately own, control or influence the running of UK companies are identified along with details of their holdings or control/ influence. For many clients this will be a significant shift. Where there are layers of ownership, including foreign entities and trust structures, these will be looked through in order to identify the individuals who ultimately control/influence the UK companies.
These rules are complex and for many businesses (privately owned businesses and overseas companies with UK subsidiaries in particular) applying them in practice could be confusing, time consuming and costly.
Failure to comply is a criminal offence with up to two years imprisonment. Both PSCs and directors have legal obligations to report the information and disclose. Sanctions can also be imposed on investments which would impact the payment of dividends and prevent the ability of a shareholder to sell their shares.
What you need to do:
- Review the rules and their application;
- Identify PSCs;
- Create a new PSC register along with governance controls to support ongoing compliance;
- File a transitional return with the Companies House when it becomes due (post June 2016).
Please do not hesitate to contact us if you have any questions. The Corporate legal team at Red Square London will answer your questions and will assist you with the application of the new requirements.