Private companies need to be aware of an important change to company law coming into effect on 6 April which requires them to keep a public register of individuals who have significant control over the company. Julian Milan, a solicitor in the Ansons corporate and commercial law team, explains the changes.
The Small Business, Enterprise and Employment Act 2015 requires such companies to keep details of individuals who own or control more than 25 per cent of the company’s shares or voting rights or otherwise have significant influence or control over the company in a new company register. The objective of the legislation is to identify any persons who have significant control (known as PSCs) and so interests held in trusts or by nominees or jointly held are also caught. Typically, subsidiary companies will need to identify their parent company as a Relevant Legal Entity (RLE).
Unless the company persuades a court that a request is not for a proper purpose, the company register must be freely available for inspection at the registered office or principal place of business and copies must also be provided within 5 days of request for a standard fee of £12.
From 30 June, the information will need to be filed at Companies House when a company makes its annual return and will form part of a new online public register which will be freely searchable against both company and individual names.
If a company is unsure, it must give a notice to anyone who it knows or has reasonable cause to believe is registrable as a PSC requiring the person to give or confirm prescribed details including their date of birth, address and the nature of their control over the company. The date of birth and address details will not appear on the public register unless the company choses to keep its register only at Companies House, but this information will be made available to local authorities and generally to credit reference agencies. In rare cases, where there is a demonstrable risk of violence to the individual, personal details may be kept off the register.
In the event that the company fails to send a notice to a person who knows or ought to know that they are a person who has significant control within a month of the person becoming one, that person is also under a separate obligation to notify the company of the information.
Failure to comply with their obligations by either company officers or owners is a criminal offence punishable by up two years imprisonment and there is no defence for a slight or inadvertent breach.
The government intends to publish further detailed guidance as to how to comply with the new obligations. In the meantime, companies should prepare to comply with the new law.
For further information about corporate and commercial legal services, please contact Julian Milan on 01543 466 660 or email firstname.lastname@example.org