On the 6th of April 2016, new government legislation came into play; a register was created for ‘persons with significant control’. UK companies must keep this register so that individuals that have significant control over businesses are identified and their holdings are then made public.
The definition of a ‘person with significant control’ is somebody with a 25% share of the company or higher.
The main reason for the PSC Register’s creation is to allow transparency within these businesses. Such transparency will help combat fraudulent acts within the business, examples being money laundering and tax evasion. The EU has introduced a similar act: the Fourth Money Laundering Directive, which must be implemented, by all of the EU member states by 26th June 2017.
What does it mean to companies?
Prior to this legislation, the only individuals that companies needed to record were the legal owners of their shares. However, this new rule means that companies will have to look through the many layers of ownership and identify those who have significant control of the company. It is the companies’ obligation to keep a record of these people who directly or indirectly have significant control over a company.
As of the 6th April 2016, a company’s PSC register should never be blank, in the case of a company still in the process of identifying its key shareholders – this face must be recorded. The company will have an obligation to record a number of key details about each individual PSC. The PSC’s name, date of birth, nationality and service address must be made publicly available.
What do companies need to do now?
- Identify every individual within the company who has significant control
- Ensure a register is kept with each PSC’s details
- If the identifying process isn’t complete yet, ensure that fact is recorded
The legislation is put in place to ensure business owners and shareholders are honest about their ownership and to prevent any foul play. This is a good move, and prevents shareholders in large businesses from fraudulent acts is crucially important.
If you wish to know more about the Persons With Significant Control legislation, contact us by email at