PSC Registers: latest developments

As we near 6 April, when UK companies and LLPs will have to start maintaining a register of persons having significant control of them, the Government has published final regulations and guidance which complete the rule book.

Statutory guidance

One of the ways someone can be a PSC is if they exercise, or have the right to exercise, significant influence or control over a company or LLP. The statutory guidance sets out what is meant by significant influence or control, some factors which would indicate significant influence or control (including being a shadow director) and some factors which would not ordinarily indicate significant influence or control.

Click here for the draft guidance in the context of companies and here for the draft guidance in the context of LLPs.

Application to LLPs

Limited Liability Partnerships will be required to maintain a PSC register in the same way as companies. Regulations will apply the relevant provisions of Companies Act 2006 to LLPs with certain adaptations. In particular the criteria for whether someone is a PSC of an LLP are different from those for companies.

    Someone will be a PSC of an LLP if they:

    • have the right to share in more than 25% of any surplus assets of the LLP on a winding up;
    • hold, directly or indirectly, more than 25% of the rights to vote on those matters which are to be decided upon by a vote of the members of the LLP;
    • hold, directly or indirectly, the right to appoint or remove the majority of the persons who are entitled to take part in the management of the LLP;
    • have the right to exercise, or actually exercise, significant influence or control over the LLP; or
    • the trustees of a trust or the members of a firm that is not a legal person meet any of the other conditions (in their capacity as such) in relation to the LLP, or would do so if they were individuals, and the person has the right to exercise, or actually exercises, significant influence or control over the activities of that trust or firm.

    Someone is not automatically a PSC of an LLP if they have the right to share in more than 25% of its profits, but the statutory guidance (see above) states that if someone is more likely than not to receive more than 25% of profits that is indicative that they have the right to exercise significant influence or control.

    Click here for the draft Limited Liability Partnerships (Register of People with Significant Control) Regulations 2016.

    Exemptions and procedures

    Regulations have been laid which cover the following matters:

    • which companies should be exempt from the requirement to keep a PSC register. As well as UK companies that comply with DTR 5 (i.e. those listed on the LSE or AIM), UK companies will also be exempt if they have voting shares listed on another EEA regulated market or if they are listed on a market that has rules deemed equivalent to DTR 5 (Israel, Japan, Switzerland or the USA);
    • the information about the nature of control to be recorded on the PSC register. This will be, broadly, noting which of the criteria for being a PSC are fulfilled and, in the case of shares and voting rights, whether the PSC holds 25-50%, 50-75% or 75-100%;

       the regime for the protection of those at serious risk of violence or intimidation;

    • the mandatory content of notices companies can serve on those who fail to respond to questions from a company trying to establish who their PSCs are; and

    • that a company can charge £12 per request to provide copies of a register entry.

    Click here for the Register of People with Significant Control Regulations 2016.

    Non-statutory guidance

    There is also informal BIS guidance on the new rules (not to be confused with the formal statutory guidance on significant influence or control). Click here for the informal guidance for companies, LLPs and SEs.

    Now we have the final pieces of the PSC jigsaw, we have re-issued our factsheets on the new regime. Click here for a guide for UK corporates. Please speak to your usual Linklaters contact if you would prefer to see our separate guides for overseas investors, for private equity houses and their portfolio companies and for sovereign wealth funds and state owned entities.