Posted by Janetta Barrett, Solicitor
The PSC regime – a misstep in company regulation?
Since 1 April 2016 companies have been required to hold and maintain a register of people with significant control (PSC Register). Failure to provide accurate information on the PSC Register and failure to comply with notices requiring someone to provide information are criminal offences, and may result in a fine and or a prison sentence of up to two years.
The principal aim of the register was to make it easier for the public and law enforcement organisations to ascertain who ultimately owns and controls UK companies, to promote trust amongst businesses and provide better intelligence for criminal investigations.
Paradoxically the additional requirements on companies to hold and maintain a PSC register were introduced just a couple of months before the government made changes to the annual filings companies are require to make to help reduce the administrative burden on companies.
For many companies ascertaining their PSCs is straightforward but for others it is more complex. At the end of last year the Law Society and the City of London Law Society jointly produced a series of Q&As regarding the PSC requirements under the Companies Act 2006. The Q&As aim to highlight particular complexities that are not specifically addressed by either the legislation governing the PSC regime or the associated BEIS guidance.
The Q&As focus on five main areas of the PSC regime:
- holding shares, votes and board appointment rights;
- indirect interests and majority stakes;
- trusts and funds;
- reasonable steps, restrictions and warning notices; and
- position on incorporation.
The Q&A can be found by following the link below:
In our view the PSC Register regime was a misstep in company regulation and disclosure and enhancements to the previous annual return regime could’ve addressed concerns in a manner causing less confusion amongst businesses and without adding to the red tape burden faced by companies. For now however, companies are obliged to comply with the regime and, given the penalties for non-compliance, it is essential that your company complies. For more information on your company’s PSC Register, or to discuss any other corporate law matter, please contact Janetta Barrett or another member of our Corporate team.
If you have any enquiries, please contact Janetta Barret on:
01225 459921 Email us
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