Background: the PSC register and the transparency agenda
Legislation for the new register of people with significant control (the “PSC register”) is contained in the Small Business, Enterprise and Employment Bill (the “SBEEB”), currently going through Parliament. Every UK company (other than a publicly traded company) will have to maintain a PSC register, which will contain information on individuals who ultimately own or control more than 25% of a company’s shares or voting rights, or who otherwise exercise control over the company and its management.
The SBEEB also contains certain other measures designed to increase transparency in corporate structures, including the abolition of bearer shares and corporate directors. We have a section dedicated to the introduction of the PSC register on osborneclarke.com here.
Announcement of provisional implementation plan
On 15 January 2015, the Department for Business, Innovation and Skills (BIS) published a provisional implementation plan for relevant parts of the SBEEB, including the introduction of the PSC register. In the words of Jo Swinson, the Under Secretary of State responsible for the SBEEB, the Government wants to make “sure those affected by reform have as much notice as possible”.
The announcement sets out four key dates which are, in each case, “subject to the will of Parliament”:
- Two months after Royal Assent of the SBEEB: No new issues of bearer shares. Nine month period for conversion of existing bearer shares commences.
- October 2015: Prohibition on corporate directors comes into force (the Government is currently consulting on possible exceptions to the ban, including for subsidiaries of listed companies).
- January 2016: Companies required to keep their PSC register from this date.
- April 2016: PSC information required to be filed at Companies House.
Creation of new working groups
The Government also announced the creation of two new working groups related to the PSC register.
One will prepare guidance to help companies implement the new requirements and will be chaired by Peter Swabey of the Institute of Chartered Secretaries and Administrators.
A second group of company law experts will oversee the development of the draft statutory guidance required to set out what is meant by “significant influence or control” – currently the most subjective of the tests for determining whether or not a person should be entered onto a company’s PSC register.
Suppressing public disclosure of personal information
The Government is also continuing to consider the circumstances in which personal information relating to individuals can be kept off the PSC register – in the announcement the distinction is made between individuals “at serious risk of violence or intimidation as a result of a company’s activities” who will be able to keep their personal information off the register – and those exposed to “pure economic risks”, who likely will not. It is anticipated that relevant individuals and their representatives will be able to apply for a non-disclosure order in advance of becoming a PSC to ensure protection from “day one”.
Current legislative status: will the PSC register become law before the General Election?
The SBEEB is currently in the committee stage in the House of Lords, and whether or not the SBEEB will become law before the General Election on 7 May 2015 remains to be seen.