There have been new changes in the legislation regarding how business owners are required to register the people with significant control (PSCs) within their business.
As with all new changes in legislation it is important to ensure that your business is meeting the new requirements.
What do the changes within legislation mean?
From June 2016 onwards all businesses must deliver a register of the individuals or legal entities that have control over the company. This must be supplied annually to Companies House along with the register of members and directors.
Those who are also incorporating a new company will have to register an initial list of those with significant control within the business to Companies House.
The legislation applies to incorporated companies that are limited by shares and guarantee and unlimited companies. However, the new laws do not apply to other entities such as Limited Liability Partnerships (LLPs) or Charitable Incorporated Organisations (CIOs).
How is a Person with Significant Control defined?
Before being able to decide who the people of significant control within your business are it is important to be able to fully understand how they are defined.
People with significant control are those who have a say within an organisation, in some cases they can be referred to as a ‘director’ however in some other circumstances they can have other job titles such as office manager and senior consultant.
Persons with Significant Control (PSCs) can also be defined by the following:
In some circumstances a company may be owned or controlled by a legal entity and therefore this legal entity must be put on the PSC register if it is relevant and registerable in relation to the company.
- A person who has more than 25% of shares within a company
- A person who has the right to appoint or remove the majority directors
- A person who otherwise has the right to exercise or actually exercise significant influence or control
- A person who has the right to have control over activities taking place within the trust or firm and is not a legal entity
What is my responsibility as a business owner?
As a director of a business it is your responsibility to inform HMRC of all of the Persons of Significant Control within your business. There is a simple 5 step process to follow when doing this:
Need help with these new changes?
- Take steps to find out who the people who have significant control within the business, look at shareholders and their control within business activities
- Contact the people who you to believe have significant control and ask them questions to see if they do in fact meet the requirements
- List all of the persons of significant interest within the business on your company’s own PSC register
- File this at Companies House as part of all the other documentation for your business
- Be sure to keep this information updated, it must be submitted at least once a year and any changes must be shared with HMRC
If you are unsure how to meet the new requirements laid out in the Persons of Significant Interest 2016 Act KA Farr can provide advice on the subject.
To speak to one of our team of accountants contact us by calling 01704 211434 and we will be more than happy to help!