1. Every UK company and every UK limited liability partnership (LLP) has to maintain its own PSC register. This includes wholly-owned subsidiaries and dormant companies. It does not include UK places of establishment (i.e. a UK branch office of an overseas company). The only exception is for companies listed on certain public markets.
2. Companies and LLPs start maintaining the register from 6 April 2016. The information on the register has to be provided to Companies House from 30 June 2016, as part of the filing of the Confirmation Statement (which has replaced the Annual Return).
3. The register identifies the individuals who have significant control over the company or LLP. A company or LLP may have multiple people with significant control or none.
(a) For companies, the register records information about the individuals who, ultimately own or control more than 25% of the company’s shares or voting rights, can appoint or remove the majority of the board, or who otherwise exercise significant influence or control over the company.
(b) For LLPs, the register records information about the individuals who ultimately hold rights over more than 25% of the LLPs assets on a winding up, holds more than 25% of the voting rights, can appoint or remove the majority of those involved in the LLP’s management or who otherwise exercise significant influence or control over the LLP.
(c) If significant control is exercised through another entity which itself has to keep a PSC register or which is listed on certain stock exchanges, details about that entity must be registered instead of the individual’s details. That way the same information does not have to be recorded on multiple registers but significant control can be tracked through chains of entities.
4. Each PSC register is open to public inspection and the Companies House record is free to search online (residential addresses and day of birth will be suppressed).
5. Companies and LLPs are obliged to take reasonable steps to identify its registerable people, who in turn are obliged to provide the information to be recorded on the register. Failure to comply is a criminal offence which on conviction could lead to fines and/or imprisonment of up to two years.
6. Companies and LLPs can impose a “restrictions notice” on a person’s interest if they fail to provide requested information. An interest which has had a restrictions notice applied to it cannot be transferred, cannot exercise any rights (e.g. voting rights), no shares may be issued in respect of the interest and cannot have any payment made in respect of it (e.g. dividend or capital payments).
7. The register cannot be blank. There are prescribed statements that must be entered on the register whilst the company or LLP is carrying out its investigation, or if there is no one with significant control.
8. The register forms part of a global move by governments and other organisations towards greater transparency in corporate structures, with the aim of combatting money laundering, terrorist financing and tax evasion. Whilst the UK is the first major jurisdiction to implement a public beneficial ownership register, the concept forms part of the Fourth Money Laundering Directive which will need to be implemented across the EU by June 2017.