Who’s in control of your business?
You may have had the frustrating experience of chasing payment from a delinquent client, only to be fobbed off by everyone you speak to. Nobody, it seems, wants to admit to being in control of a business when it owes money! New PSC Register legislation comes into force on 6th April 2016 which makes hiding behind holding companies and corporate shareholders a thing of the past.
All UK companies and LLPs (other than PLCs, who have their own regime) must keep a register of individuals who have a ‘significant level of control’ over the business. This is a requirement of the Small Business, Enterprise and Employment Act 2015.
They’re referred to in the legislation as People with Significant Control or PSCs. While this is great if you’re trying to track down the power-base in a business, it also means a new legal obligation for you and your business. Breach could result in a fine or even prison.
What is ‘Significant Control’?
In order to meet the criteria to be included on the register, an individual or entity must:
- Hold 25% of the company’s shares, either directly or indirectly;
- Hold 25% of the company’s voting rights, either directly or indirectly;
- Hold the right to appoint or remove a majority of the board of directors, either directly or indirectly;
- Hold the right to exercise, or actually exercise, significant influence or control over the company; or;
- Hold the right to exercise, or actually exercise, significant influence or control over a trust or firm that is not a legal entity and meets the above conditions.
What do you have to do?
First, serve notice to each individual or entity with significant control. Ask for the details required and request their consent to include them in the register. If it’s a company, you’ll need to get the details of each PSC of that company too. Then, compile your register and keep it safely at your premises. You will be obliged to disclose its contents on request, subject to certain conditions. If this all sounds like a lot of trouble and time take a look at our offer below. When it’s time to complete your Annual Confirmation (replacing the old Annual Return (AR01) sent to Companies House, from 30th June), include this information, as requested, within it.
What happens if you don’t do it?
Under the new laws, non-compliance with these duties is a criminal offence. Failure to comply could result in a fine or even a jail term of up to two years.
Need some help?
The principles of the PSC register are simple, but the details of implementing the new rules are fiddly so let us help you.
We’ll get your PSC register completed before the 6th April 2016 deadline, provided all of your PSCs are co-operative, for only £250 + VAT.
We’ll manage it for you – send the notices, collect the data and compile the register in accordance with the new laws. Then once you have it in place all you need to do is maintain it, or ask us for help if required.
Time is short and this offer is limited so please contact me now if you’d like us to sort out your PSC register for you.
Founder and Managing Director, Devant