new register of people with significant control - will your business be ready?

Transcription

1 briefing March 2016 new register f peple with significant cntrl - will yur business be ready? Frm 6 April 2016 all nn-listed UK cmpanies must cmply with new rules t create a register f the peple that have significant influence r cntrl ver them. These registers will be pen t public inspectin. The requirements are ne f the key features f the Gvernment s plan t achieve transparency in beneficial wnership f UK cmpanies and are backed-up with criminal sanctins fr nn-cmpliance. The purpse f this nte is t prvide yu with an verview f the new PSC regime. It is nt intended t be cmprehensive and it is essential that prfessinal advice is btained if guidance is required n specific issues. Key pints Frm 6 April 2016 all nn-listed UK incrprated cmpanies and LLPs must set-up a new statutry register f peple with significant influence r cntrl ver them (PSCs). Cmpanies must make their PSC registers available fr public inspectin. Directrs must take active steps t identify their PSCs, including sending ut infrmatin-seeking ntices. A cmpany s PSC register must never be empty and must always be kept up-t-date. PSCs that fail t respnd t infrmatin requests may have their share rights frzen. PSCs must vlunteer-up infrmatin abut their PSC status, when the cmpany is in default. Cmpanies and their fficers that fail t cmply with their PSC bligatins risk cmmitting criminal ffences. Criminal sanctins may be impsed n PSCs t. Frm 30 June 2016 PSC infrmatin will be searchable at Cmpanies Huse, as it must be included in bth cnfirmatin statements (new-style annual returns) and incrpratin frms fr new cmpanies filed after that date. Why are the new requirements being intrduced? By intrducing the PSC disclsure regime, the UK aims t lead the way in tackling the prblem f crprate pacity which is believed t facilitate illicit activity and lead t pr crprate behaviur. The Gvernment s plicy bjective in implementing the new rules is, t reduce crime and imprve the business envirnment t facilitate ecnmic grwth thrugh enhanced crprate transparency. Accrding t Gvernment estimates, sme 3.4 millin cmpanies (and 59,000 LLPs) will be impacted by the PSC register measures, at an equivalent annual net cst t business f 85.9m _4 1

2 Wh is affected? Frm 6 April 2016, virtually all UK incrprated cmpanies and LLPs will have t set up a new register in their statutry bks which identify peple with significant influence r cntrl ver them (PSCs). The new register will be similar t the registers f members r directrs. Only cmpanies with shares traded n the Lndn Stck Exchange, AIM r ISDX (r certain verseas markets) are exempt, as they are subject t ther regulatry wnership disclsure rules. This means that nt nly will whlly-wned subsidiaries and drmant cmpanies be caught by the new regime t create a PSC register, but s will cmpanies limited by guarantee including charities, cmmunity interest cmpanies and unlimited cmpanies. Fr the time being, ther legal entities such as bdies crprate including Ryal Charter crpratins, limited partnerships and charitable incrprated rganisatins will NOT have t set up a PSC register. Nr will verseas entities perating in the UK, thugh they might be subject t similar requirements in their hme cuntry. But if these types f entities appear in the wnership structure f a UK cmpany, then they might be called upn t respnd t infrmatin-seeking ntices. What is clear is that the intrductin f the PSC regime will result in the expenditure f time and mney by many. Applying the new rules shuld be relatively straightfrward if yu are a small family-wned cmpany r a traditinally-structured UK grup, hwever if yur business has a mre cmplex wnership structure cmpliance may prve mre prblematic. The Gvernment has issued sme lengthy guidance fr cmpanies and LLPs n their new PSC bligatins ( Guidance ), which is available here. The Guidance aims t explain the new law and is intended t help cmpanies (and LLPs) cmply with it, but at 87 pages it is nt a quick read! Imprtant definitins The legislatin defines a PSC as being an individual wh meets ne r mre f five Cnditins in relatin t a cmpany. These tests are explained in mre detail belw, but include a hlding f ver 25% f the shares r rights in the cmpany, r the right t exercise significant influence r cntrl ver it. Where yur cmpany is wned r cntrlled by anther legal entity as ppsed t an individual, the details f that legal entity must be included n yur PSC register if it is bth (i) relevant and (ii) registrable in relatin t yur cmpany. Relevant legal entities (RLEs) a legal entity is relevant if it is: a bdy crprate r firm that is a legal persn under the law by which it is gverned; and wuld be a PSC in relatin t yur cmpany if it were an individual; and it is subject t its wn disclsure requirements, that is, it has t keep its wn PSC register (r it is subject t certain ther regulatry wnership disclsure rules). Registrable RLEs - an RLE is registrable in relatin t yur cmpany if it is the first RLE in yur cmpany s wnership chain _4 2

3 Nte that gvernments, gvernment departments, lcal authrities and certain internatinal rganisatins are treated as individuals fr the purpses f the PSC legislatin, therefre they can be PSCs and must be included in a cmpany s PSC register if they satisfy ne r mre f the five Cnditins. Wh is a PSC? the five Cnditins There are five tests (referred t in the legislatin as Cnditins ) t determine whether smene is a PSC f a cmpany. A PSC is smene that (either alne r with thers): wns mre than 25% f the cmpany's shares OR hlds mre than 25% f the cmpany's vting rights OR can appint r remve a majrity f the bard f directrs OR exercises r has the right t exercise significant influence r cntrl ver the cmpany OR exercises r has the right t exercise significant influence r cntrl ver the activities f a trust (f which the persn is a trustee) r firm (f which the persn is a member) and the trust r firm meets ne r mre f the preceding cnditins. Cnditins 1 t 3 1. X hlds, directly r indirectly, mre than 25% f the cmpany s shares When calculating whether smene hlds mre than 25% f a cmpany s shares, yu must cnsider whether the hlding amunts t mre than 25% f the nminal value f the cmpany s issued share capital, r if the cmpany des nt have a share capital, whether the hlding gives the hlder the right r rights t share in mre than 25% f the capital r prfits f that cmpany. Because charities set up as cmpanies limited by guarantee must have articles f assciatin which prevent any distributin f prfits r capital t members, they will nt have any PSCs that satisfy this cnditin. 2. X hlds, directly r indirectly, mre than 25% f the cmpany s vting rights Vting rights means: rights cnferred n sharehlders r members t vte at general meetings f the cmpany n all r substantially all matters; r if the cmpany des nt have general meetings at which matters are decided by exercise f vting rights, the Cnditin is satisfied where X hlds rights, equivalent t thse f a persn entitled t exercise vting rights in a cmpany, t blck changes t the verall plicy f the cmpany r t the terms f its cnstitutin. 3. X hlds the right, directly r indirectly, t appint r remve a majrity f the cmpany s bard f directrs The right t appint r remve a majrity f a cmpany s bard f directrs (r the equivalent management bdy if the cmpany has n bard) means the right t appint r remve directrs hlding a majrity f the vting rights at bard meetings n all r substantially all matters _4 3

4 Meaning f indirectly Shares and rights in a cmpany are nly held indirectly if the entity directly abve the cmpany meets any f Cnditins 1 t 3 AND each entity abve it in the wnership chain hlds a majrity stake in the entity immediately belw it in the wnership chain. Smene will hld a majrity stake in an entity if: it hlds a majrity f vting rights; it is a member and has the right t appint r remve a majrity f its bard f directrs; it is a member and cntrls alne (r pursuant t an agreement with ther members) a majrity f the vting rights; r it has the right t exercise, r actually exercises, dminant influence r cntrl ver that entity. Other wnership arrangements The legislatin includes a number f supplementary rules which apply when interpreting the PSC Cnditins, these include: Nminee structures Where shares are held by a nminee n anther s behalf, the shares are treated as being held by that persn, this means that that persn and nt the nminee must be entered n the PSC register where the Cnditin is met by the nminee. Jint hldings Shares r rights in a cmpany may be held jintly by tw r mre peple. In such cases, each persn is treated as hlding the shares r rights in their wn right. S if Mr and Mrs Jnes have a jint interest in 30% f the shares in a cmpany, they will bth be a registrable persn by virtue f each hlding 30% f its shares. Jint arrangements Shares r rights in a cmpany may als be subject t jint arrangements between persns, where thse persns agree t act jintly in respect f the shares r rights in questin. In such cases, each persn is treated as hlding the cmbined shares r rights f bth f them. Fr example, if Mr and Mrs Jnes each hld 20% f the shares in a cmpany and have made a jint arrangement, they will bth be a registrable persn in relatin t the cmpany by virtue f hlding 40% f its shares. A jint arrangement is an arrangement between the hlders f shares r rights that they will exercise all r substantially all f their respective rights tgether, in a pre-determined way. It is a brad definitin that includes any scheme, agreement r understanding, whether r nt legally enfrceable, and any cnventin, custm practice r any kind, prvided that there is a degree f stability abut it. The intentin is t exclude ne-ff actins r decisins which wuld nt equate t significant cntrl. Cnditin 4 significant influence r cntrl 4. X has the right t exercise, r actually exercises, significant influence r cntrl ver a cmpany The Gvernment has published statutry guidance fr cmpanies n the meaning f significant influence r cntrl (SIOC Guidance), which is available here. The SIOC Guidance says it is nt an exhaustive statement f what amunts t SIOC, but instead prvides examples which wuld be indicative f whether a persn falls within the scpe f Cnditin 4. It als utlines sme safe harburs, referred t in the SIOC Guidance as excepted rles, where peple will be utside scpe. SIOC examples The SIOC Guidance distinguishes between situatins where a persn has a right t exercise SIOC and where a persn actually exercises SIOC _4 4

5 Examples f situatins that might cnstitute a right t exercise SIOC are where an individual has: abslute decisin rights ver decisins related t the running f the cmpany s business, such as adpting r amending its business plan; abslute vet rights ver decisins related t the running f the cmpany s business, such as adpting r amending its business plan r making any additinal brrwing frm lenders, unless that vet right is t prtect a minrity interest; r abslute vet rights ver the appintment f the majrity f the cmpany's directrs, being thse directrs wh hld a majrity f the vting rights at bard meetings n all r substantially all matters. The SIOC Guidance ntes that if a persn hlds abslute vet rights in relatin t certain fundamental matters in rder t prtect a minrity interest in the cmpany, such as vet rights relating t a change t the cmpany's cnstitutin r dilutin f shares r rights, then these vet rights are unlikely, n their wn, t cnstitute significant influence r cntrl ver the cmpany. Examples f situatins which wuld be indicative f a persn actually exercising SIOC are: a directr, wh wns imprtant assets r has key relatinships that are imprtant t the running f the cmpany's business, uses this additinal pwer t influence the utcme f decisins related t the running f the business; a persn, wh is nt n the bard, regularly r cnsistently directs r influences a significant sectin f the bard r is regularly cnsulted abut bard decisins and whse views influence thse decisins, such as a shadw directr; r a cmpany funder, wh n lnger has a significant sharehlding, but wh makes recmmendatins t ther sharehlders n hw t vte and whse recmmendatins are always, r almst always, fllwed. Safe harburs / excepted rles The SIOC Guidance specifies certain rles and relatinships that wuld nt, n their wn, result in a persn being cnsidered t be exercising SIOC, but it pints ut that such a persn culd still be a persn with significant influence ver the cmpany if their rle r relatinship differs in material respects r cntains significantly different features frm hw the rle r relatinship is generally understd r exercised. Excepted rles include the fllwing: a persn wh prvides advice r directin in a prfessinal capacity, such as a lawyer, accuntant, management cnsultant, investment manager, tax adviser r financial adviser; a persn engaged in a third-party cmmercial r financial agreement, such as a lender, supplier r custmer; an emplyee acting in the curse f his emplyment and as nminee fr his emplyer, including an emplyee, directr r CEO f a third party (such as a crprate directr cmpany) that has significant influence r cntrl ver the cmpany; and a directr f the cmpany, including a managing directr, sle directr, nn-executive directr r executive directr with a casting vte. Cnditin 5 significant influence r cntrl trusts, partnerships etc 5. (i) X has the right t exercise, r actually exercises, significant influence r cntrl ver the activities f a trust r firm and (ii) the trustees f that trust r the members f that firm (which are nt legal _4 5

6 persns under the law by which they are gverned) meet any f the ther specified Cnditins (in their capacity as such) in relatin t the cmpany, r wuld d s if they were individuals The SIOC Guidance prvides examples which wuld be indicative f whether a persn falls within the scpe f Cnditin 5, as well as utlining sme excepted rles, where peple will be utside scpe. If a trust r a firm (which is nt treated as being a legal persn by the new legislatin) has any interest in r cntrls yur cmpany, yu must cnsider whether that trust r firm wuld have met any f Cnditins 1 t 4, if it were an individual. If it des satisfy ne r mre f these Cnditins then yu have t cnsider whether there is an individual r legal entity wh cntrls the activities f the trust r firm. Examples in the SIOC Guidance f situatins that might cnstitute a right t exercise SIOC ver a trust r firm include where an individual has the right t: appint r remve any f the trustees r partners, except thrugh applicatin t the curts, r as a result f breach f fiduciary duty by the trustees; direct the distributin f funds r assets; direct investment decisins f the trust r firm; amend the trust r partnership deed; r revke the trust r terminate the partnership. The SIOC Guidance says that a persn is likely t actually exercise significant influence r cntrl ver a trust r firm if they are regularly invlved in the running f the trust r firm, fr example a persn wh issues instructins, which are generally fllwed, as t the activities f the trust r firm t the trustee(s) r members f the firm. This may be a settlr r beneficiary wh is actively invlved in directing the activities f the trust. The excepted rles fr trust and firm situatins set ut in the SIOC Guidance are very similar t the excepted rles fr cmpanies. Sme simple examples f satisfying the Cnditins fr being a PSC (adapted frm the Guidance) When is an individual registrable? 50% 50% 20% 20% 20% 20% 20% Persn 1 (PSC) Persn 2 (PSC) P1 P2 P3 P4 P5 UK Cmpany A UK Cmpany Z Example 1 Example _4 6

7 Example 1 Bth Persn 1 and Persn 2 each hld 50% f Cmpany A s shares. Each f thse shares has ne vte, s Persn 1 and Persn 2 als each hld 50% f the vting rights in Cmpany A. Therefre Cmpany A must enter bth Persn 1 and Persn 2 as PSCs, meeting bth Cnditins 1 and 2 n its PSC register. Example 2 - Assuming there are n jint arrangements between P1 t P5 t exercise their rights tgether, and nne f them meets any f the ther Cnditins (such as exercising SIOC ver Cmpany Z), Cmpany Z will have n PSCs because nne f P1 t P5 hld enugh shares/vting rights t satisfy Cnditins 1 r 2 and it must enter that fact n its PSC register. When is a RLE registrable? Persn 1 Persn 1 Persn 1 (PSC) 100% UK Cmpany C (RLE) UK Cmpany C (registrable RLE) 100% UK Cmpany C UK Cmpany B (registrable RLE) 100% UK Cmpany B UK Cmpany B UK Cmpany A UK Cmpany A UK Cmpany A Example 3 Example 4 Example 5 Example 3 - Cmpany B is the registrable RLE in relatin t Cmpany A and its details must be entered n Cmpany A s PSC register. This is because Cmpany B wns 100% f the shares in Cmpany A and Cmpany B is a UK cmpany that must keep a PSC register. Cmpany A des nt have t lk further up its chain f wnership fr any indirect interests held via Cmpany B, as these are nt registrable in relatin t Cmpany A. Cnsequently Cmpany C, which is als an RLE, and Persn 1 d nt need t be entered n Cmpany A s PSC register. Example 4 - Cmpany C is a UK cmpany and its details will be entered n Cmpany B s PSC register. As the first RLE in Cmpany B s chain f wnership, Cmpany C is registrable in relatin t Cmpany B nly. Persn 1 des nt need t g n Cmpany B s PSC register even thugh he r she again hlds an interest in Cmpany B indirectly. Example 5 - Persn 1 is required t be entered n Cmpany C s PSC register nly _4 7

8 What will yu need t d? Identify Cnfirm Enfrce (if necessary) Mnitr File IDENTIFY After creating yur PSC register, yu must take reasnable steps t investigate and identify whether there are any individuals r legal entities that meet the cnditins fr being a PSC r a registrable RLE in relatin t yur cmpany. The Guidance sets ut sme examples f the steps a cmpany culd typically take, including checking its register f members and reviewing its articles f assciatin, any sharehlders agreements, any ther agreement between sharehlders and any rights attaching t its shares. Hwever it stresses that these suggestins are nt exhaustive r definitive and there might be further actins that a cmpany might take depending n its wn circumstances. The new legislatin envisages that cmpanies will need t send ut infrmatin-seeking ntices t relevant individuals that might be PSCs, t legal entities r t ther peple that might knw the identity f the cmpany s PSCs. Examples f these ntices are included in the Guidance. CONFIRM When yu have identified an individual wh is a PSC in relatin t yur cmpany, yu have all the relevant infrmatin abut that individual s required particulars (explained belw) and he r she has cnfirmed that infrmatin, nly then must the cmpany g ahead and write up its PSC register in relatin t that PSC. Infrmatin can be treated as cnfirmed if, fr example, the PSC supplied it r it was prvided with his r her knwledge. In cntrast, if yu have identified a registrable RLE in relatin t yur cmpany and yu have all the relevant infrmatin yu need abut it t enter it n yur PSC register, yu may g ahead. Whilst infrmatin abut a registrable RLE must be accurate, it des NOT need t be cnfirmed. ENFORCE (IF NECESSARY) Restrictins regime freezing interests in shares/rights If a cmpany sends ut infrmatin-seeking ntices t suspected PSCs r registrable RLEs, but they fail t respnd, then the cmpany may impse sanctins n that persns shares/rights in an attempt t encurage them t reply and prvide the infrmatin that the cmpany needs t cmplete its PSC register. Under the restrictins regime established by the legislatin, the cmpany must first issue a warning ntice and then, if the persn still fails t respnd, a restrictins ntice. The restrictins ntice will effectively freeze the ecnmic interest in the relevant shares/rights by prhibiting the hlder frm vting them r receiving any dividends n them and viding any purprted transfer f the interest. The Gvernment Guidance ntes that applying restrictins is a significant step that can nly be taken when a persn has repeatedly failed t respnd t the cmpany s requests fr infrmatin. Whilst a cmpany is NOT required by law t impse restrictins, the Guidance states that, yu must seriusly cnsider it as part f meeting yur legal requirements t take reasnable steps. If yur cmpany is in this situatin and chses nt t impse restrictins, yu shuld be able t justify yur decisin _4 8

9 MONITOR A cmpany must always keep its PSC register up-t-date. This might invlve sending ut mre infrmatin-seeking ntices, if it thinks that certain changes have ccurred. Relevant changes wuld be if a persn r entity ceases t be a PSC r registrable RLE r if infrmatin abut them in the PSC register changes. FILE Frm 30 June 2016 nwards, a cmpany s PSC infrmatin must be included in: new-style annual returns (t be called cnfirmatin statements ) sent t Cmpanies Huse after that date; and new-style incrpratin frms (IN01s) n the incrpratin f any new cmpanies frmed after that date. Duties n PSCs and registrable RLEs There are crrespnding duties n individual PSCs and registrable RLEs t prvide infrmatin abut themselves and their PSC status, when the cmpany is in default f its investigatry bligatins. They must als vlunteer-up infrmatin abut changes in their required particulars (explained belw) r if they cease t be a PSC r registrable RLE, if the cmpany fails in its mnitring bligatins. What infrmatin must be included in yur PSC register? A cmpany s PSC register must never be empty. It must cntain infrmatin abut: the status f the cmpany s investigatin int its PSCs and registrable RLEs, using fficial wrding; required particulars f any PSCs and registrable RLEs, such as their name, address etc; and details f the nature f any PSC s cntrl ver the cmpany, that is, which f Cnditins 1-5 applies, again using fficial wrding. Investigatin status If yu are nt in a psitin t enter details in yur PSC register, because, fr example, yur investigatins are still nging t determine whether yur cmpany has any PSCs r registrable RLEs, r the PSC infrmatin has nt yet been cnfirmed, then the relevant facts must be entered in yur PSC register. The legislatin sets ut fficial wrding that must be used. S, fr example, if n 6 April 2016 when the new rules cme int frce, yu are taking reasnable steps t identify any PSCs, yu must include the fllwing statement in yur PSC register: The cmpany has nt yet cmpleted taking reasnable steps t find ut if there is anyne wh is a registrable persn r a registrable relevant legal entity in relatin t the cmpany. The requirement t maintain a PSC register applies whether r nt yur cmpany has any PSCs. If yu have taken all reasnable steps and yu are cnfident that there are n PSCs r registrable RLEs, then that fact must be entered n yur PSC register, using the fllwing fficial wrding: The cmpany knws r has reasnable cause t believe that there is n registrable persn r registrable relevant legal entity in relatin t the cmpany _4 9

10 Required particulars When yu have identified yur cmpany s PSCs (and their details have been cnfirmed) r registrable RLEs and yu are ready t write up the PSC register, the required particulars that must be recrded are as fllws: Registrable individual Name Service address Cuntry f r state (r part f the UK) in which the persn is usually resident Natinality Date f birth (day f birth nt publically available at CH unless cmpany has elected t keep its register slely at CH) Usual residential address (nt publically available but available t public authrities and credit reference agencies) Date he/she became a registrable persn* Nature f his/her cntrl ver the cmpany (which f 5 Cnditins are met & quantificatin f interest) Details f any restrictins n using r disclsing that individual s particulars Registrable relevant legal entity Crprate r firm name Registered r principal ffice N/A Legal frm f entity & gverning law N/A Registratin number & details f register in which registered Date it became a registrable relevant legal entity* Nature f its cntrl ver the cmpany N/A *The date n which an individual r legal entity becmes a registrable persn r RLE in relatin t a cmpany in existence when the new bligatins cme int frce will be 6 April Nature f cntrl The legislatin als sets ut fficial wrding that must be included in the PSC register abut the nature f the cntrl ver the cmpany. Where Cnditins 1 and/r 2 apply cncerning hlding shares r vting rights in the cmpany, there are three ptins t chse frm: hlding mre than 25% but nt mre than 50% hlding mre than 50% but less than 75% r hlding 75% r mre. Fr instance, in Example 1 abve, the PSC register entries fr bth Persn 1 and Persn 2 in relatin t the nature f their cntrl wuld be: The persn hlds, directly r indirectly, mre than 25% but nt mre than 50% f the shares in the cmpany. AND The persn hlds, directly r indirectly, mre than 25% but nt mre than 50% f the vting rights in the cmpany _4 10

11 What are the cnsequences f failing t cmply with the new PSC bligatins? Criminal sanctins - cmpanies Cmpanies and their fficers that fail t cmply with their new duties under the PSC regime risk cmmitting criminal ffences, punishable by a fine and/r up t tw years imprisnment. The legislatin sets ut new ffences that apply t cmpanies that fail t: set-up a PSC register; take reasnable steps t identify their PSCs and btain required infrmatin abut them; keep their PSC infrmatin up-t-date; make the PSC register available fr inspectin at their registered ffice r SAIL; and allw inspectin and prvide cpies f PSC register, when required t d s. Criminal sanctins PSCs and registrable RLEs PSCs r registrable RLEs that fail either t respnd t a cmpany s infrmatin seeking ntices, r, t vlunteerup infrmatin abut their PSC status (when the cmpany is in default), may als cmmit criminal ffences. An ffence may als be cmmitted if the PSC knwingly r recklessly makes a false statement in purprted cmpliance with a ntice. In additin, if a PSC re registrable RLE des certain things in cntraventin f r t circumvent the effect f a restrictins ntice n his/ its sharehlding r interest, such as attempting t dispse f his interest, vting his/its shares r appinting a prxy ver them, this may als be a criminal ffence. The penalties fr the these ffences vary, but ffenders may be liable n cnvictin t a ne r tw year prisn sentence and/r a fine. Other sanctins freezing interests in shares/rights As mentined abve, if a cmpany sends ut infrmatin-seeking ntices t suspected PSCs re registrable RLEs, but they fail t respnd, then the cmpany may impse civil sanctins n such persns by impsing restrictins that effectively freeze the ecnmic interest in the shares/rights in questin, fr example, in relatin t vting, transfer and the right t receive dividends. Will a cmpany s PSC infrmatin be publically available? Yes, a cmpany must keep its PSC register pen fr inspectin by the public, withut any charge, at its registered ffice (r its SAIL, that is, its single alternative inspectin lcatin), but the right f inspectin will be subject t a prper purpse test. Cmpanies will have t prvide a cpy f their PSC register within five wrking days f a request, n payment f a fee f n mre than 12. Furthermre they must infrm the persn inspecting and/r receiving cpies f the PSC register f the mst recent date f alteratins and if any further alteratins are due t be made. In any event, as mentined abve, frm 30 June 2016 nwards, a cmpany s PSC infrmatin must be included in bth cnfirmatin statements and new-incrpratin frms filed after that date _4 11

12 Save where a successful prtectin applicatin has been made (see belw), nly the usual residential address f an individual PSC and the day element f his r her date f birth will be hidden n the Cmpanies Huse register. The prtectin regime A prtectin regime, similar t the existing regime fr the prtectin f directrs residential addresses, is t be put in place fr PSC s residential addresses. Tgether with the day element f the PSCs date f birth, this infrmatin will be hidden n the Cmpanies Huse register. Additinally, if an individual PSC cnsiders that if as a result f their remaining PSC infrmatin being publically available at Cmpanies Huse, they r smene they live with wuld be at serius risk f vilence r intimidatin due t the cmpany s activities, then they can make an applicatin t stp the infrmatin appearing n the public register. Prtectin will be granted nly if the applicatin cntains evidence prving a serius risk r the individual already has prtectin as a cmpany directr r member f an LLP. What steps can yu start t take nw? Review yur current crprate structure including: yur register f sharehlders / members yur articles f assciatin / cnstitutinal dcuments any sharehlders agreement relating t yur cmpany any ther relevant dcuments any rights attaching t shares r in relatin t yur cmpany. Apply the statutry SIOC Guidance & the nn-statutry Guidance fr cmpanies and LLPs. Create the new PSC register in yur statutry bks, ready t g live n 6 April If necessary, prepare any infrmatin-seeking ntices ready t be sent t relevant individuals, legal entities and ther persns likely t have knwledge abut yur cmpany s PSCs (but dn t send them ut yet!). On 6 April 2006: write-up yur PSC register EITHER with the required particulars f all PSCs and registrable RLEs using the fficial wrding (as lng as the infrmatin is cmplete, and in the case f an individual PSC, it has been cnfirmed) OR with the reasnable steps fficial wrding ensure yur PSC register is available fr inspectin at yur registered ffice r SAIL send ut any infrmatin-seeking ntices where yu need mre infrmatin. Thereafter, cntinue t update yur PSC register with the status f yur PSC investigatins, using the fficial wrding, and, if yu have PSCs, their required particulars including their cntrl, using the fficial wrding. Cntinue t IDENTIFY, CONFIRM, UPDATE, and MONITOR yur cmpany s PSC infrmatin. Frm 30 June 2016 include PSC infrmatin in yur cnfirmatin statements FILED at Cmpanies Huse. When in dubt seek advice! _4 12

13 Hw can Mills & Reeve help yu? With just a mnth t g befre the new regime cmes int frce, nn-exempt UK cmpanies and LLPs shuld be preparing nw, particularly where their wnership r cntrl arrangements are cmplex. Bearing in mind the pssible criminal sanctins, directrs shuld cnsider taking legal advice n whether individuals might satisfy any f the tests fr being a PSC in relatin t their cmpany r whether they have any registrable RLEs. Similarly individuals and legal entities shuld als be cnsidering whether they have any bligatins under the new regime in relatin t their hldings in r cntrl ver any UK cmpanies r LLPs. If yu wuld like mre infrmatin n hw yu and yur cmpany will be affected by the new PSC regime, please cntact Tracey Atkins (tracey.atkins@mills-reeve.cm r +(44)(0) ) r yur usual Mills & Reeve cntact. T +44(0) Mills & Reeve LLP is a limited liability partnership authrised and regulated by the Slicitrs Regulatin Authrity and registered in England and Wales with registered number OC Its registered ffice is at Mnument Place, 24 Mnument Street, Lndn, EC3R 8AJ, which is the Lndn ffice f Mills & Reeve LLP. A list f members may be inspected at any f the LLP's ffices. The term "partner" is used t refer t a member f Mills & Reeve LLP. The cntents f this dcument are cpyright Mills & Reeve LLP. All rights reserved. This dcument cntains general advice and cmments nly and therefre specific legal advice shuld be taken befre reliance is placed upn it in any particular circumstances. Where hyperlinks are prvided t third party websites, Mills & Reeve LLP is nt respnsible fr the cntent f such sites