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Corporate transparency

From January 2016, the Small Business, Enterprise and Employment Act requires UK companies to keep a register of persons with significant control over the company (a PSC register). Companies will then need to file this information on the PSC register at Companies House from April 2016.

A 'person with significant control' over a company means, broadly, anyone who ultimately owns or controls more than 25% of the company's shares or voting rights, or who actually exercises control over the company or its management. The PSC register will include that individual's name, date of birth, nationality, address, and details of their interest in the company. In certain circumstances the details of a parent company must be noted on the register as a "relevant legal entity".

A previous proposal that trusts should keep similar records was abandoned in the UK (but remains, to a limited extent, in separate draft EU proposals). Nevertheless details of trustees and others with significant influence or control over a trust which controls a company will need to be included on the UK PSC register, so some disclosure of trust interests may still be necessary. It is not yet completely clear how the general term "exercising control" over a company or trust will be interpreted but detailed guidance is expected later this year.

The information on the PSC register will be publicly accessible (with the exception of residential addresses) and available for inspection on request by individuals. There will be some scope for refusing such requests but it remains to be seen whether the rather limited statutory provisions will provide adequate constraints.

Although the requirement to keep a PSC register does not begin until next year, companies should now start thinking about how they are going to comply with the new rules. In complex corporate structures, for example, it may be difficult to identify all relevant individuals and enquiries will need to be handled sensitively. The new regime raises issues about how confidential information is used and may well alarm those for whom privacy is important.

 

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Bankside Office

240 Blackfriars Road
London
SE1 8NW
DX 53 Chancery Lane

Telephone: +44 (0)20 7629 7411
Fax: +44 (0)20 7629 2621
Email: bh@boodlehatfield.com

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