The new obligations will apply to companies, Societates Europaeae (SEs), and Limited Liability Partnerships (LLPs).
They do not apply to Limited Partnerships (LPs), Charitable Incorporated Organisations (CIOs) or foreign companies operating in the UK. In addition, the legislation does not apply to those companies already subject to Chapter 5 of the FCA’s Disclosure and Transparency Rules, or those with voting shares that are traded on an EEA regulated market, or on one of the specified markets in Israel, Japan, Switzerland, or the United States.
While the PSC regime is only applicable to companies not listed on the AIM / LSE Main Market, subsidiaries of such companies that are not listed will have to comply.
What happens if someone ceases to be a PSC?
If a company becomes aware that a person has ceased to be a PSC, the date they ceased being a PSC must be recorded in the company’s PSC Register as soon as reasonably practicable.
The central public register at Companies House will be updated in the company’s next Confirmation Statement. Information about such persons must be kept on the company’s own register for ten years from the date on which they ceased to be a PSC.
What do you need to do?
If your company is subject to the new legislation, you have an obligation to produce and update your PSC register. This includes taking all “reasonable steps” to obtain the necessary information from potential PSCs or relevant legal entities.
It is a criminal offence not to comply with your obligations in relation to the PSC Register, both in terms of seeking and providing information. Individuals or entities that refuse to respond to requests for information could find themselves disenfranchised or face restrictions on their shares.
With the new obligations coming into force in April 2016, all affected businesses must act now to ensure compliance and avoid criminal sanctions.
Paul Matthews is a partner at Linder Myers.
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