Earlier this year, the government made some changes to the ‘people with significant control’ (PSC) register regime, as part of wider anti-money laundering measures.
As a busy business owner, you may have missed this. After all, you’ve got plenty to concern yourself with beyond changes to important, albeit relatively obscure, business legislation.
In this blog post, we’ll take you through the PSC register regime, and explain how the changes have impacted businesses just like yours.
What is the PSC register?
From the 6th of April 2016, all unlisted UK companies and limited liability partnerships (LLPs) were tasked with maintaining a register of the people with significant control and influence over business decisions and operations. This register is known as the ‘people with significant control’ register, or PSC register for short.
Its introduction was a crucial part of the government’s commitment to improve corporate transparency in the UK.
The PSC identifies the individuals within a business who either own or control more than 25% of a company’s shares (or more than 25% of an LLP’s assets), more than 25% of a company or LLP’s voting rights, or who otherwise exercise control over a company or LLP and its senior management.
Under many circumstances, the individual or individuals who control a company can be different from those listed on the register of members. The PSC register therefore gives us a clearer indication of who is calling the shots in a business. This information is available to the public, and it’s searchable on the Companies House website.
What are the changes?
Prior to June 2017, whenever a change to PSC information occurred, there was a two month period in which the company or LLP had to be notified. However, there was no specific time period within which the company or LLP had to update its PSC register. What’s more, the public record held by Companies House was only required to be updated once a year via the company’s / LLP’s confirmation statement.
Now, however, when a change occurs, the company or LLP will have 14 days to update its register, and another 14 days to send the information to Companies House.
This change was implemented because the EU’s 4th Money Laundering Directive (4MLD) requires that all information held on the PSC register is up-to-date.
How do the changes affect Scottish Limited Partnerships and general Scottish Partnerships?
As part of this update, Companies House confirmed that general Scottish Partnerships (all partners are corporate bodies) and Scottish Limited Partnerships will both come under the PSC register regime.
This means that these businesses will also need to register their PSC information at Companies House.
Changes to the disclosure of information
Originally, a person with significant control could apply for a restriction to ensure that certain pieces of information wouldn’t be disclosed on the public register, but could be disclosed to specific public authorities and credit reference agencies if necessary.
Thanks to the changes, this disclosure of sensitive information has been extended, where appropriate, to credit and financial institutions.
Are there more changes coming?
At the time of the announcement for the changes, Companies House acknowledged that, for certain companies, the legal framework for PSC can appear rather complex. With that in mind, additional steps should be taken to improve overall compliance.
This suggests that Companies House will be reviewing the existing guidelines in due course, and evaluating if it provides the necessary level of support for business owners, which in turn could result in further changes somewhere along the line.
Where can I go for support?
If you’re not sure where to start with PSC, or you’re just learning of its existence in this post, we can help.
As specialist advisors for companies of all shapes and sizes, you can rely on Tyrrell and Company to keep your business compliant in the face of complex and ever-changing legislation.
Contact us today to speak with one of our friendly team members and take the first step towards running a secure and transparent business.