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Beneficial Owners Register in the UK. People with Significant control.

The Small Business, Enterprise and Employment Act 2015 now requires all UK Limited companies and Limited Liability Partnerships (LLPs) to keep a register of “people with significant control “. The PSC register must indicate all individuals who directly or indirectly own or control more than 25% of a company’s shares or voting rights or who otherwise exercise control over the company and its management. In other words, the Register will contain not just the names of shareholders and directors (or members in LLP), but as well names of Ultimate Beneficial Owners (UBOs).

 

The PSC Registers become active as of April 6th 2016. And as of June 30th 2016 the information goes live and is available for public via Companies House.

 

Below we will list important thing you need to know about PSC Register:

 

Who is PSC?

A PSC is anyone in the company who meets one or more of the conditions listed in the legislation. This is a person who:

(i) owns more than 25% of the company’s shares

(ii) owns more than 25% of the company’s voting rights

(iii) has the right to appoint or remove a majority of the board of directors

(iv) has significant influence or control over the company

(v) has significant influence or control over a trust or firm

 

Confirmation Statement will substitute from now on the Annual Return and will contain annually updated information about all PSCs of the companies or LLPs. For pre-existing companies the first Confirmation Statements will be dated April 6th 2016. For all new entities the Confirmation Statement will be filed along with the registration.

PSC Register will not be empty. People responsible for filing the statements will take all the steps to confirm the information on PSCs. The procedure and exact wording for all possible cases are thoroughly described in the Guidance.

Failing to comply with the requirements is a criminal offence. Failure to provide the information or disclosing false information is a subject to a penalty of up to two years imprisonment. In addition, actions may be taken to restrict your control rights over the company until the required information is provided

What information is required from the PSC?The new Register will contain the following information on each individual who is confirmed as PSC

  • name

  • service address

  • usual residential address – it will not be public

  • country and state of residence

  • nationality

  • date of birth – it will not be public

  • date they became a PSC (for pre-existing entities that date is April 6th 2016)

  • nature of company control

 

Information about PSCs must be confirmed before it enters the Register and becomes public. The confirmation can be received by post or by-email. In case the persons, who are supposed to confirm their PSC status, are not reachable or refuse to provide their data, these facts must be reflected in the Register too, and the Guidance prescribes specific wording for such cases.

Individual or Legal Bodies. The PSC by any means refers to a private individual, who owns or controls the company directly or indirectly. The only case where the legal entity can be enter as a PSC, is when it is a Relevant Legal Entity (RLE), roughly speaking, it is another UK Company (or UK LLP), which has a PSC Register on its own. In case the UK Company is owned by overseas entities (or if the members of the LLP are overseas entities), then the information on those companies is not reflected in the PSC Register, but the information on the persons who ultimately own and control the overseas companies will be entered in the PSC Register.

Companies or LLPs without PSCs.

For example, there are 5 individuals who own and control 20% of the shares or voting rights. In this case it is considered that, these individuals do not meet any of the conditions (i) to (v). The Register of such Company will state : “The company knows or has reasonable cause to believe that there is no registrable person or registrable relevant legal entity in relation to the company.”

When someone stops being a PSC. If there are any changes, errors or updates, these facts must be recorded to the PSC Registers. If someone ceases to be a PSC any longer, than the date when the person leaves the Register is affixed. Although, all information about the previous PCSs must be kept for at least 10 years by the companies internally, and by the Companies House – for indefinite period.

There are more guidelines to be provided for the process of filing the information on the PCS. The United Kingdom has taken the lead in establishing the Beneficial Owners database. Following the UK example and the 4th Money Laundering Directive, other EU Member States will most likely set-up their own Registers of the Beneficial Owners from summer of 2017. The new provisions will most likely chase the Scottish Limited Partnerships too. It is time to evaluate the proper use and structure of your foreign company, especially the UK one. Contact us for further information and advice!

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