The Small Business, Enterprise and Employment Bill (sponsored by Vince Cable – the Business Secretary), is currently going through parliamentary processes in Westminster. When it is passed, this Bill will become an Act and will seek to make various changes to corporate and other legislation applicable to companies established in the UK.
One of these changes will be to introduce the requirement for companies to maintain, along with other statutory registers, a Register of Persons with Significant Control (PSC) over the company and to make this public subject to some exclusions. Duties will be Imposed on companies to gather information and on others to supply the information to enable the PSC register to be kept. These changes will be made by introducing a new Part 21A to the (UK) Companies Act 2006. Current proposals are for this to apply from January 2016 with filings from April 2016.
Who is a PSC? For these purposes, a person with significant control over a company is defined as an individual that either alone or with other share or right holders meets one or more of these conditions:
- holds, directly or indirectly, more than 25% of the shares (or right to share in the capital or profits where no share capital);
- holds, directly or indirectly, more than 25% of the voting rights;
- is entitled, directly or indirectly, to appoint or exercise a right to appoint or remove a majority of the board of directors;
- has the right to exercise, or actually exercises, “significant influence or control” over the company. An expert working group is being formed to draft statutory guidance on this;
- trustees of a trust or the members of a firm that is not a legal person meet one or more of the other specified conditions in their capacity as such or would do if they were individuals.
Exclusions. The new Part 21A will apply to all UK-established companies, other than listed public companies (issuers) to which Chapter 5 of the Disclosure and Transparency Rules apply. The UK government is expected to allow the suppression of information on the PSC register from public disclosure in certain limited circumstances e.g. protection to individuals at serious risk of violence or intimidation arising from the company’s activities.