Changes to the People of Significant Control (PSC) Register

You may be surprised to hear that over a year has passed since the introduction of the PSC Register which saw most UK registered companies and LLPs being required to prepare and maintain a register of people with significant control.

We now see further changes to this regime as the UK seeks to implement the EU’s 4th Money Laundering Directive (4MLD). As with the introduction of the PSC Register, the new changes have been introduced to help with increasing transparency and to help target money laundering and terrorist financing activities.

The main change for relevant companies and LLPs is that it will no longer be sufficient to simply update the PSC register on an annual basis via the Confirmation Statement (which I am sure we are all now aware replaced the Annual Return). Instead, relevant bodies will have fourteen days to update their register if a change is required.

It will therefore be incumbent upon companies to be vigilant as to any changes which may trigger a change in their PSC Register. The most obvious example would be if a party were to purchase shares in a company taking their total shareholding (directly or indirectly) to in excess of 25% of the company’s shares – this would make this person (or relevant legal entity) a ‘person of significant control’ and Companies House would need to be notified of this fact within fourteen days. Of course, the same notification requirements would apply, if a person or relevant legal entity were to cease to be a PSC (such as by selling shares to take themselves under the relevant 25% shareholding).

Companies House also have to be kept updated of the specific details of a person of significant control (or relevant legal entity) so, for example, if a person’s address details were to change, then Companies House would need to be notified of this change.

A Confirmation Statement will still have to be filed each year but this statement can no longer be used as the update of the PSC register. Companies must first update their PSC register with Companies House and, thereafter, file their Confirmation Statement.

It is therefore important that the relevant companies and LLPs are aware of their obligations and ensure that their register is up to date. Companies House have stated that they intend to take a more rigorous approach to non-compliance and companies and LLPs may find themselves subject to a £500 fine if they fail to adhere to these requirements.

In addition, as of 24 July the ‘persons of significant control regime’ will extend to include Scottish Limited Partnerships and Scottish Partnerships if all the partners are corporate bodies. It is also worth reminding parties that the PSC regime also applies to dormant companies.

If you think that your organisation may now be subject to the PSC regime or if you require changes to be made to your PSC register with Companies House and wish to discuss this further with Macleod & MacCallum please contact our Pamela McGowan or Corra Irwin who would be happy to assist.

July 21, 2017