Make sure you’re part of the trust and transparency agenda

September 24, 2015

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The Small Business, Enterprise and Employment Act (SBBE) received Royal Assent on 26 March 2015. The Act makes a number of significant changes to company law, and from April 2016 UK incorporated companies and LLPs will be required to maintain a register of persons of significant control (PSC).

The aim of this new regime is to make it easier for those dealing with a company to identify the individuals who own (directly/indirectly) that company and/or who influence the decisions about how that company is operating.

It will also help to address criminal activity (such as tax evasion, money laundering or otherwise) and satisfy in part the UK Government’s commitments under the Fourth Money Laundering Directive (4thMLD), which also comes in to effect across the EU in 2017.

How could it impact you?

  • A PSC will have an obligation to disclose  the required information to the company.
  • Companies and directors will have to demonstrate they have taken reasonable steps to identify PSCs, and document what steps they have taken (in the register) where a PSC cannot be identified.
  • Companies will be able to freeze the interest of any individual or entity in the company if they do not respond to a notice asking them for their details needed for the PSC register.
  • Real time reporting – companies that know, or have reason to believe, that their ownership has changed must update the register and Companies House on a real time basis (this will be introduced in 2017 following implementation of the 4thMLD).
  • Companies must have appropriate internal controls in place in order to track and maintain compliance.

It’s important to understand the implications to your company and entity structure early so that you can comply fully with the new regime. Failure to do so could result in financial penalties and/or imprisonment for offenders (including PSCs and directors).

To discuss this issue further please don’t hesitate to get in touch or talk to your usual PwC adviser.

 

Matt Timmons is a Director in PwC Legal’s Entity Governance and Compliance team. The team supports UK and Global businesses in managing all aspects of legal entity compliance and governance.    He has key responsibility for the relationships and delivery of company secretarial services and has recently been advising multinational groups needing to respond to increased regulation and focus on legal entity structures, and the impact this is having on their future legal entity governance and compliance obligations.


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