Changes to the register of people with significant control
- AuthorTim Field
Who has significant control of your company and what are the consequences of not knowing?
Since 6 April 2016 there has been an obligation placed upon private limited companies to keep and maintain a register of those people or entities that have significant influence or control over the company, this is sometimes referred to as a register of beneficial owners.
In determining whether a person has significant influence or control over a company there are 5 criteria which need to be examined:
- An individual who holds more than 25% of shares in the company;
- An individual who holds more than 25% of voting rights in the company;
- An individual who holds the right to appoint or remove the majority of the board of directors of the company;
- An individual who has the right to exercise, or actually exercises, significant influence or control over the company; and
- Where a trust or firm would satisfy one of the first four conditions if it were an individual. Any individual holding the right to exercise, or actually or control over the activities of that trust or firm.
Whilst a company has a duty to update its own records regarding persons with beneficial control, up until 26 June 2017 a company only needed to notify and update Companies House of any changes when it submitted its Confirmation Statement.
Since 26 June a company must now notify Companies House of any changes to its PSC register within 14 days of that change occurring. Failure to do so is a criminal offence and can be punished by either a fine or up to two years’ imprisonment.
Given the potential punishment for failure to comply, it is imperative that all companies take this requirement seriously, should you be in any doubt as to who is a PSC within your company or how to complete the necessary paperwork to notify Companies House, please contact Birkett Long who will be pleased to assist you. I am based in our Colchester Office and can be reached on 01206 217 366 or email@example.com.