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6: Company law changes for charities – confirmation statements and the PSC regime

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6: Company law changes for charities – confirmation statements and the PSC regime
Leave your thoughts Nicola Evans

By Nicola Evans

Following earlier blogs on the PSC regime and charities (accessible here), this is a reminder that the next stage of the PSC (people with significant control) regime takes effect today, 30 June 2016. Companies will now need to start providing their PSC information to Companies House when they submit their ‘confirmation statement’, which is the replacement for the annual return.

Companies House has added some information and links about the new confirmation statement and the PSC register on gov.uk.

As noted previously, the requirement for all companies and LLPs (unless within the limited exceptions) to maintain a PSC register is already in force. Companies House will be checking, when companies and LLPs submit their confirmation statements, that PSC information is included. That information is also likely to be shared with other agencies, such as HMRC, and most of the information will be public (on Companies House and via the company’s/LLP’s register) unless a successful application is made to protect the information (see below).

There is a plethora of guidance available on the PSC regime, including the PSC Guidance for companies, LLPs and SEs which seeks to explain the regime. It also includes the official wording to be entered in the PSC register and provides example documents.

We have briefings available:

The briefings aim to give an idea of how the regime can apply in practice although, as noted in the briefings, how the regime will apply in any particular case will depend upon the facts of that case. This is in part because the regime is drawn very widely, making it necessary to look beyond the basic ownership structure of the company (or LLP) to check for other powers or relationships which cause someone to fall within the ‘significant influence or control’ provisions.

Companies/LLPs should take steps now, if they have not done so already, to check that they are complying with the regime and have processes in place to enable them to maintain the PSC register.

Notices under the PSC regime

The process of establishing and maintaining the PSC register can include sending out notices to those thought to be PSCs, or those thought to have relevant information about PSCs. It is worth remembering that almost anyone could be served with such a notice requiring information – this is important because failure to ‘comply’ with such a notice within one month can be a criminal offence, so such notices are not to be ignored.

You can see sample notices in the PSC Guidance for companies, LLPs and SEs at Annex 3 (for companies) and Annex 5 (for LLPs). A notice requiring information about a PSC is referred to as a section 790D (or s790D) notice and can seek specific information about the PSC (e.g. date of birth, usual residential address and country of usual residence).

Your professional advisers can also be served with notices requiring them to give information about PSCs. Information which is subject to legal professional privilege is protected under the legislation, but otherwise the adviser would be likely to need to square compliance with the company law duty with compliance with their professional and legal obligations to the PSC.

Protected information

As noted above, most of the PSC information on a PSC register will be made public on the Companies House register. A company’s or LLP’s PSC register will also be available for inspection by any member of the public with a ‘proper purpose’ (which is interpreted widely and can only be refused by making an application to court). There is, however, a limited protection regime to protect the PSC’s residential address and other registered details in certain circumstances. These are summarised in our Charities FAQs briefing and further details are set out at Annex 1 of the Guidance for people with significant control. Information on applying for protection can be found in the Companies House guidance on restricting the disclosure of your information.

Where individuals at a company already have information protected (e.g. in their capacity as a director), Companies House has been sending out letters to inform the company of the similar regime for PSCs. However, if you think the protection regime should apply to you or one of your company’s or LLP’s PSCs, you should not wait but should apply as soon as possible.

Don’t ignore the PSC regime – act now

The regime is already in place and criminal offences can apply for getting it wrong. However, Companies House seems to be taking a pragmatic approach in seeking to help companies and LLPs to comply in these early stages. In particular, at a recent Companies House event, it seemed to be recognised that some situations will be a matter for interpretation and different companies may take a different view on similar facts. The important thing was to make a genuine attempt to follow the regime.

Charities which are affected should use this time to familiarise themselves with the regime and, where necessary, amend their processes to enable them to comply and, if necessary, to demonstrate the reasonable steps they have taken to do so.

30 June 2016

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