On December 21, 2015 the Department for Business, Innovation and Skills (BIS) published draft guidance for consultation on the new requirement for companies and limited liability partnerships (LLPs) to maintain a register of people with significant control (PSC). The draft guidance includes: statutory guidance for companies on understanding the meaning of “significant influence or control” in the context of companies, statutory guidance for LLPs on understanding the meaning of “significant influence or control” in the context of LLPs, a summary of the non-statutory guidance for companies and LLPs on the PSC requirements, and the non-statutory guidance for companies and LLPs on the PSC requirements.
The draft statutory guidance for companies on the meaning of “significant influence or control” provides that a person has significant control over a company if one of the specified conditions are satisfied. The first three specified conditions require the holding of more than 25 per cent of the company’s shares or voting rights in the company or the right to appoint or remove the majority of the board of directors. The fourth and fifth specified conditions require a person to have “significant influence or control” either over the company itself or over the activities of a trust or a firm which meets any of the other specified conditions in relation to the company. The statutory guidance then goes on to discuss the following:
- how the guidance should be used;
- the meaning of significant influence and control;
- the right to exercise significant influence or control;
- the actual exercise of significant influence or control;
- fourth condition safe harbours relating to significant influence or control;
- trusts and firms and the right to exercise/the actual exercise of influence or control; and
- fifth condition safe harbours relating to significant influence or control.
The draft statutory guidance for LLPs on “significant influence or control” covers similar matters.
The draft non-statutory guidance discusses the regime for registering PSCs, identifying PSCs, information to be entered on the PSC register, updating PSC information, public and protected information, companies keeping the information on their own register at Companies House, understanding the PSC conditions in detail, and when companies are unable to get information for the PSC register.
Comments on the draft guidance are requested by January 11, 2015.
(BIS, Statutory Guidance on the meaning of “significant influence or control” in the context of companies, 21.12.15)
(BIS, Statutory guidance on the meaning of “significant influence or control” in the context of Limited Liability Partnerships (LLPs), 21.12.15)
(BIS, Summary guide for companies – Register of people with significant control, 21.12.15)
(BIS, People with Significant Control: Guidance for Companies and LLPs, 21.12.15)