Who’s in significant control of companies?It is now simple for anyone to find out who really owns and controls a private company, even when shares are held in nominee names.
Disclosure isn’t an optionUnlisted UK companies now have to disclose to Companies House the names of all people who have significant control over their ownership or management, and keep that information up to date. The requirement – in place since 2016 but widened from 26 June 2017 – is intended to improve corporate transparency and prevent money laundering and terrorist financing. Since 2016, all UK unlisted companies and limited liability partnerships have had to keep a register of persons with significant control (PSCs), and include that information on their annual confirmation statement. Unregistered companies and some listed companies have now been brought into this regime, and so have most Scottish partnerships – although with some modifications. Also from 26 June 2017, companies and LLPs have to update their PSC register within 14 days of any change, and send that information to Companies House within a further 14 days. Scottish partnerships have to notify information within 14 days of obtaining it as they do not have a PSC register.
Identifying PSCsIdentifying a company’s PSCs is often straightforward: it is any individual who owns more than 25% of the shares and/or voting rights, or has the right (under the company’s Articles) to appoint or remove the majority of the board of directors. But it also includes any other individual who has the right to exercise (or actually does exercise) significant influence or control over the company. Some companies have several PSCs; others may have none. For example, a company may have two equal shareholders, whose shares all have voting rights, and there may be no other person who has any control or influence. That company will have two PSCs – the two shareholders. Another company may have five equal shareholders with voting rights that match their shares. In this case none of them would be a PSC unless they have made arrangements to exercise their rights together. The fact that shareholders may be related, e.g. a married couple or mother and daughter, is not relevant if they act independently. A company that has no PSCs must still keep a PSC register and must declare that fact. It gets more complicated where a company is owned by another company or by a trust or partnership. The PSC register of a subsidiary will generally show the company that owns the subsidiary’s shares, but does not have to look beyond the immediate owner. It is different where a trust or firm satisfies the ownership or control conditions. In such a case the PSC of the company will be any individual with significant influence or control over the activities of that trust or firm.
Registered informationCompanies must take all reasonable steps to identify their PSCs and contact them to obtain all the required information. This consists of their name, date of birth, nationality, country of usual residence, service address, usual residential address if different, date they became a PSC of the company and which conditions they meet to be a PSC. It is a criminal offence if PSCs do not provide this information, and most of it will appear on the public register. The main exceptions are date of birth and residential address where a different service address has been given. Companies must also keep the information up to date, for example if an individual’s rights or shareholding changes or if they change their address. Please contact us to help you meet the requirements for your business.
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