New legislation has come into place which states that UK companies must create a list of ‘people with significant control’, otherwise known as PSCs. The new rules also require companies to keep this list up to date and register the relevant information annually at Companies House! At Finnies, we are working to help businesses produce this register and would like to keep you informed on the new requirements for businesses. Keep reading for a quick update on the new legislation and to download our FREE factsheet! The New Legislation This new ruling came into effect from the 6th April 2016, and applies to all UK private companies (including those limited by guarantee) and UK LLPs. By law, a director or officer of the company are required to follow a 3-step process of: Identifying the people with significant control across the company Recording the details of these staff on the company’s PSC register Providing this information to Companies House annually. How You Identify a PSC The definition of a person with significant control is any person who fits one of more of the following criteria: The individual either directly or indirectly holds more than 25% of the shares in a company The individual either directly or indirectly holds more than 25% of the voting rights in a company The individual has the right to appoint or remove a majority of a company's board of directors The individual exercises, or has the right to exercise, significant influence or control over the company The individual exercises, or has the right to exercise, significant influence or control over the activities of a trust or firm which is not a legal entity, and which itself meets one of the above conditions. Additionally, if an individual identifies themselves to be someone with significant control, a proactive disclosure obligation will apply to that individual, requiring them to notify the company of their interest. The Companies that are exempt A few companies are exempt from this new requirement, including limited partnerships and Charitable Incorporated Organisations. However, these companies re instead subject to other transparency rules, and we highly recommend you seek expert advice for information on the requirements of your company. The Penalties Failure to comply with this new legislation could lead to the company or directors, or identified PSCs committing a criminal offence, which in turn could lead to a fine or imprisonment. What next? If you are unsure of your obligations and would like to discuss how the PSC register or any other company secretarial requirements affect you, please contact us and we would be delighted to assist you.