Annual returns are being replaced with ‘confirmation statements’ from June 2016

From June 2016, the annual return is being replaced; with ‘confirmation statements’.

If we currently prepare and submit your annual return, there is no need to worry as we will be preparing and submitting your confirmation statement.

There may be some additional information we will require, around people with significant control (PSC) but in the vast majority of cases the PSC will be the Directors/shareholders of your company.

There is some more information on PSC below, if you want to read about it, but we will be advising you when we prepare and submit your company Confirmation statement.

The People with Significant Control (PSC) register

What is the PSC register?

In order to improve transparency and trust in companies The Small Business, Enterprise and Employment Act 2015 introduces material changes to UK company law. One of these is the introduction of a new company register of people with significant control (the PSC register).

The implementation of a compulsory regime which captures information on a wide range of people with significant influence or control over a company (PSCs) and, in most cases, makes it publicly available, will have a material impact on the administration of UK companies.

When does the PSC register regime start?

From 6 April 2016 relevant UK companies and limited liability partnerships (LLPs) must start keeping a PSC register; and from 30 June 2016 relevant UK companies and LLPs must start including PSC details when filing their new annual confirmation statements (which will replace the current annual return from the same date).

Who is a PSC?

A PSC is someone in your company who meets any of the following 5 criteria:

•          Owns 25% or more of the company’s shares (we have clarified this point with Companies House)
•          Holds 25% or more of the company’s voting rights (we have clarified this point with Companies House)
•          Holds the right to appoint or remove the majority of directors
•          Has the right to, or actually exercises significant influence or control
•          Holds the right to exercise or actually exercises significant control over a trust or company that meets any of the other 4 conditions.

What information appears in the PSC register?

The PSC register will exist in two forms. One kept by the company itself and the public version of the register which will be accessible via Companies House records. The following information will be included:

Individual PSCs.

•          Name
•          Service address
•          Country of residence
•          Nationality
•          Residential address (not included on the public register unless it’s also a service address)
•          Date of birth
•          The date when the individual became a PSC in relation to your company18
•          Which of the five conditions for being a PSC the individual meets, with quantification of the interest where relevant - For a PSC who meets one or more of conditions (i) to (iii) your company is not required to identify  whether they also meet condition (iv) - You must use the official wording
•          Any restrictions on disclosing the PSC’s information that are in place

Corporate PSC’s

•          Name of the legal entity
•          The address of its registered or principal office
•          The legal form of the entity and the law by which it is governed
•          If applicable, a register in which it appears (including details of the state) and its registration number
•          The date when it became a registrable relevant legal entity in relation to your company
•          Which of the five conditions for being a PSC it meets, with quantification of its interest where relevant - For a relevant legal entity that meets one or more of conditions (i) to (iii) your company is not required to identify whether they also meet condition (iv) - You must use the official wording.

Examples of the official wording 

•          The person holds, directly or indirectly, more than 25% but not more than 50% of the shares in the company.
•          The person holds, directly or indirectly, more than 50% but less than 75% of the shares in the company.
•          The person holds, directly or indirectly, 75% or more of the shares in the company.

Making sure you get the information

A company is required to take reasonable steps to contact its PSCs and confirm the information for the register. If someone refuses to provide the information they will commit a criminal offence. A company may also approach people who it believes have knowledge of who its PSCs are. Failure to comply is also a criminal offence. It may be necessary to place restrictions on the shares or voting rights of the person or entity withholding information to make sure that they provide it.

What are the sanctions for non-compliance?

Failure to provide accurate information on the PSC register and failure to comply with notices requiring someone to provide information are criminal offences, and may result in a fine and or a prison sentence of up to two years.

For a summary of the guide please use this link.

For a copy of the full guidance please use this link.