The Small Business, Enterprise and Employment Act 2015 (SBEEA) received Royal Assent on 26th March 2015 and the majority of its provisions are now in force. The aim of the SBEEA is to enhance ownership transparency of UK companies and Limited Liability Partnerships as well as increasing trust in the UK as a place to do business. In addition, as part of the Government’s Red Tape Challenge, the SBEEA has made changes aimed at simplifying filing for small businesses and improving the accuracy of information on public registers at Companies House.
The most significant aspect of the SBEEA is the new requirement for all UK companies (with some limited exceptions) to create and maintain a register of persons of significant control (PSCs).
As of 6th April 2016, all UK companies and LLPs were required to create a PSC Register documenting who are their PSCs or, if the identity or full information of the PSCs is not yet known, to commence investigations.
From 30th June, UK companies and LLPs will be required to update a public PSC register at Companies House in the new Confirmation Statements which are replacing the Annual Return. It is a criminal offence not to comply with these new provisions.
What is a PSC? In very basic terms it is a shareholder who owns over 25% of a UK company or, in relation to an LLP, it is a member entitled to share in over 25% of the surplus assets of the LLP on a winding up. However, there are “5 Specified Conditions” including anyone who “holds the right to exercise, or actually exercises significant influence or control” over the company or LLP. It is this aspect of the legislation which is causing the most concern and difficulty for companies/LLPs looking to establish who their PSCs are. Note also that there is a proactive obligation on PSCs themselves to notify.
In addition, the legislation requires companies to ‘look through’ non-legal entities such as trusts, partnerships and limited partnerships to find persons who have the right to exercise or actually exercise significant influence or control over the trust/partnership/limited partnership. This clearly has implications for the usual corporate structures employed by private equity funds as typically they will include limited partnerships and general partner LLPs.
As part of the course, you will be provided with a “Practical Steps” guide for companies, an example of a PSC Register and corporate structure charts demonstrating which individuals and which legal entities (known as RLEs) should appear on a company’s register.
This course is essential for anyone wishing to gain an overview of the extensive (and somewhat unwieldy) legislation, statutory guidance, non-statutory guidance and regulations together with some practical advice. The course is relevant to anyone involved with UK companies, whether they are in the UK or overseas, and particularly for those involved with or advising private equity funds.