With the introduction of the Register of People of Significant Control on 6 April 2016, we’ve noticed a number of UK company business owners mistakenly believe they do not have to take any action until 30 June 2016. Unfortunately, you cannot wait until 30 June 2016 to make entries into the People with Significant Control (PSC) Register.

From 6 April 2016 the legal requirement is for a company to take reasonable steps (the Department for Business Innovation & Skills defines this in section 2.3 of its guidance notes) to identify the PSCs and maintain the PSC register.

As we have mentioned online previously, a PSC is an individual who meets one or more of the five conditions below:

• Directly or indirectly holds more than 25% of the shares
• Directly or indirectly holds more than 25% of the voting rights
• Directly or indirectly holds the right to appoint or remove a majority of directors
• Has the right to exercise or actually exercises significant influence or control
• Has the right to exercise or actually exercises significant influence or control over the activities of a trust or firm which is not a legal entity

However, a company may be owned or controlled by a legal entity and not an individual. A legal entity must be entered in the PSC register if it is relevant and registrable in relation to the company. A legal entity is relevant if it meets one or more of the 5 conditions above and meets one or more of the conditions below:

• Keeps its own PSC register
• Complies with the Financial Conduct Authority’s Disclosure and Transparency rules
• Has shares traded on a regulated market in the UK or European Economic Area or other international markets.

A relevant legal entity (RLE) is registrable if it is the first RLE in the company’s chain of ownership.

From 30 June 2016 onward existing companies must file the PSC information for the Public Register at Companies House in the form of a Confirmation Statement (formerly known as an Annual Return).

Also from 30 June 2016 onwards newly incorporated companies will have to send a statement of initial significant control to Companies House together with the appropriate documents to incorporate a new UK company.

As mentioned above, reasonable steps must be taken as a PSC register cannot be empty. Failure to keep the PSC Register up-to-date will be a criminal offence.

If you are having difficulty with identifying PSCs in your company and creating your PSC register, we are happy to assist. Please get in touch to discuss your requirements.