18 April 2016 16:45
What SMEs need to know about new PSC legislation
From this month, the Government requires all companies to hold a register of "people with significant control" (PSC).
The PSC register will include information about the individuals who own or control companies including their name, month and year of birth, nationality and details of their interest in the company.
A person of significant control is someone that holds more than 25% of shares or voting rights in a company, or who has the right to appoint or remove the majority of the board of directors.
From 30 June 2016, UK companies (except listed companies) and limited liability partnerships (LLPs) will need to declare this information when issuing their annual statement to Companies House. The details must then be confirmed or updated every year.
It will be a criminal offence for an individual not to comply. Both the register and the information on file at Companies House will be open to inspection by members of the public.
Department for business minister Baroness Neville Rolfe said: "Companies that disguise who owns or controls them are not playing by the rules and have something to hide. This register, the first of its kind in the world, will help tackle abuse of corporate entities. This is part of our commitment to creating an environment of trust and accountability for business."
According to Rolfe, the "overwhelming majority" of UK companies abide by the law and make a valuable contribution to society. But, she says, there are exceptions. "Some of the features of the company structure which make it good for business also make it attractive to criminals. Companies can be misused to facilitate a range of criminal activities - from money laundering to tax evasion, corruption to terrorist financing."
The register is part of the Government's commitment to corporate transparency. The UK is the first country to create a public register of this kind but other G20 countries have agreed to take similar action.
More information on how to register people with significant control can be found on the Government website.