<img alt="" src="https://secure.mass1soma.com/153281.png" style="display:none;">

The Small Business, Enterprise & Employment Bill – PSC Register


The Small Business, Enterprise & Employment Bill – PSC RegisterThe Small Business, Enterprise and Employment Bill (“SBEE”) has now passed through the UK House of Commons and is currently under consideration by the House of Lords. The SBEE will implement a UK Government commitment to promote an agenda of corporate transparency and international tax reform.

Register Of People With Significant Control

The SBEE Bill will introduce a requirement for companies to keep a Register of People with Significant Control (“PSC Register”) and to disclose any changes to that register at least annually to Companies House. The requirement to maintain a PSC Register will apply to all UK companies other than companies that are subject to the major shareholding notification regime in chapter 5 of the Disclosure and Transparency Rules (DTR 5) such as companies traded on a regulated market.

Implementation Into The Companies Act 2006

Most of the provisions regarding the new PSC register will be contained in the new Part 21A of the Companies Act 2006, inserted by the SBEE Bill. The PSC Register will be required to contain details of any individual who:

  • Holds, more than 25% of the shares in the company;
  • Is entitled, to exercise more than 25% of the voting rights in the company;
  • Is entitled, to appoint or remove a majority of the board of directors;
  • Has the right to exercise, or actually exercises, significant influence or control over the company; and
  • Has the right to exercise, or actually exercises, significant influence or control over the activities of a trust or firm that meets any of the above conditions in relation to the company.

Purpose Of The PSC Register Legislation

The main purpose of the PSC Register is to ensure companies disclose the individuals who exercise significant control over them. It will not be possible to enter another company in the register as a significant controller unless it is a ‘relevant legal entity’, i.e. any UK company that is subject to PSC register requirements.

An overseas company that has not been designated as a relevant legal entity will not therefore be capable of being entered in the register as a significant controller by any of its UK subsidiaries. Instead, the UK subsidiaries will need to ascertain whether there are any individuals behind its overseas parent who would qualify as significant controllers in relation to itself.

Obligation To Notify 

A person who is a significant controller of a UK company will have an obligation to notify the company of that fact, together with the details that the company must enter about them in its PSC Register. The obligation only arises if they have been a significant controller for 28 continuous days. They will then have a further 14 days in which to notify the company, failure to do so, is an offence.

Sanctions Companies Can Impose

A company can impose sanctions on any person they believe to have a relevant interest (i.e. a shareholding) in the company but fail to respond to a notice from the company. These restrictions can include:

  • Rendering any transfer of that person’s interest void;
  • Making it impossible for them to exercise any rights in that interest;
  • Making it illegal to issue any shares in right of the interest or in pursuance of an offer made to the interest-holder;
  • Except in a liquidation, preventing payment of any sums due from the company in respect of the interest (e.g. dividends), whether in respect of capital or otherwise.

The SBEE introduces significant powers in relation to the transparency of the beneficial owners of companies consequently the UK government and the G8 hope that this will have a substantial impact on money laundering and other financial crime. The Bill is yet to pass through the House of Lords where there could be amendments made at committee stage, however transparency is a primary focus of the Bill and it is likely that many of the provisions in relation to the PSC register will remain unchanged.

Why Settle A Trust? - Blog CTALike what you've read? Click here to sub  


UK Delays Expansion Of Making Tax Digital
Read More
An Update On The UK's Tax On Diverted Profits
Read More
BEPS Changes to the UK-Canada Double Tax Agreement
Read More
UK Government Agrees To Ease Loan Charge Rules
Read More

 Blog Comments