How will the new system affect you going forward?
For those of you who do not know what a Person of Significant Control (PSC) is then you may wish to read my previous blog article here.
Put simply, Persons of Significant Control are generally the shareholders of the company and those that control more than 25% of its shares, though control does not have to be through shares alone.
Disclosure is required of those that persons that control 25% to 50%, between 50% and up to 75% and 75% or more of the shares, votes etc.
The originals rules on PSC were designed to increase public transparency and show who really controls any UK limited company, even one-person companies. My experience, in dealing with smaller owner-managed companies, is that all my clients are only controlled by their shareholders and who are also often the directors too.
A change has been made to the PSC rules. Under the new system, companies must update Companies House of any changes to the beneficial ownership shortly after any change occurs.
The original PSC regime was introduced by the UK government on 6 April 2016. Those who complete their own annual Companies House Confirmation Statement, previously known as Annual Return, will most probably have come across this change by now.
The PSC requirements began at the same time as Confirmation Statements were introduced and companies are required to include details of PSCs when filing a Confirmation Statement. There was no requirement to update Companies House of any changes to PSC information between the annual Confirmation Statements. This has now changed.
With effect from 26 June 2017, companies must now keep the list of PSC current at Companies House. Under the old rules a company’s Persons of Significant Control could change the day after a Confirmation Statement was prepared. However, the company was only required to update the central register at Companies House once a year when the next Confirmation Statement was due.
If the company’s PSC have changed, e.g. through a change of shareholding, or that the details of a PSC have changed, e.g. change of address, then Companies House must now be updated within 14 days and the company’s own separate Register of PSC must also be updated with the same 14 days.
Failure to follow these requirements is a criminal offence and can result in a fine or a prison sentence of up to two years.