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From April 2016 many UK businesses, both companies and LLPs, will be required to maintain a register of “people with significant control” (PSC) over the business. From June 2016, this PSC register will become part of a business’s annual return to Companies House. Companies House, in turn, will use this information to compile a central public register.
The government’s motivation for introducing this new requirement is to increase the transparency of who owns and controls UK businesses. This will be valuable information for potential investors. It will also add to existing measures aimed at preventing money laundering.
Certain types of company are excluded from the PSC register requirement. For example, companies that have voting shares traded on a regulated market in the UK or elsewhere in the European Economic Area, or in certain other jurisdictions, do not need to maintain a register as they are already subject to existing regulations regarding transparency of ownership.
Companies House has published detailed guidance on what the regulations mean for UK businesses, and in particular on what the term “significant control” means. In general, it refers to any individual who owns 25% or more of a company’s shares, or controls 25% or more of a company’s voting rights, or can appoint or dismiss a company’s directors. The detailed guidance also explains what should be entered in the PSC register when a company is owned by another company, or by multiple companies in a chain of ownership.
Many businesses affected by these regulations may be unaware of their new statutory duties. Having a PSC register, and keeping it up to date, are legal requirements, and not keeping one becomes a criminal offence. Companies should start planning the actions they need to take now to ensure that they are compliant.
This article is presented for general information only, and is not intended as legal advice. For more information, see the official guidance on the GOV.UK website, or consult a suitably qualified professional.
Myriad Associates are leading experts in helping businesses maximise public funding for their research and development activities through R&D Grants and R&D Tax Credits. If you would like to discuss any aspect of R&D grant funding or R&D tax relief please contact us today for a free, no-obligation consultation. We look forward to hearing from you.