In March 2015 the Small Business, Enterprise and Employment Bill (SBEE) received Royal Ascent and became an Act. This heralds a significant shift in the way the Government views and hopes to enforce corporate transparency in the UK. The Act introduces a number of changes to be phased in through 2016, with which all UK companies and Limited Liability Partnerships will need to comply.
One of the most dramatic changes is the introduction of the “People with Significant Control Register” (“PSC”). From April 2016 all UK incorporated companies and Limited Liability Partnerships will be required to maintain a new statutory register which discloses details of the individuals who ultimately control the company, looking up the corporate chain through people and legal entities, whether located in the UK or abroad. This register will be open to public inspection and potentially international revenue authorities.
What constitutes a person of significant control? A number of criteria are taken into consideration, which include: direct or indirect ownership of 25% or more in nominal value of the shares in a company; the right to exercise or control 25% or more of the voting rights in a company; the right to appoint or remove a majority of the board and other rights to exercise significant control over the company.
Limited companies and LLPs will be required to file the information on their PSC register with Companies House from April 2016 and there are sanctions for non-compliance, including the possibility of losing rights attaching to shares.
The SBEE is designed to improve transparency around company ownership and tackle directors involved in misconduct. It also introduces a number of company filing reforms which are aimed at simplifying the current filing requirements and improving the accuracy and integrity of information maintained at Companies House.
Draft guidance and secondary legislation is still awaited, but business owners would be well advised to begin working now on meeting these obligations and building them into governance controls and procedures. There will be exceptions to having your private details made public. If you would like further information on the regulations and the exceptions please do get in touch by emailing me: firstname.lastname@example.org