Insights

As a result of new European wide anti-money laundering legislation, which comes into force at the start of 2017, there are new reporting requirements for companies in the UK.

These took effect from 6^th April 2016 and require that ‘people with significant control’ (PSCs), comply with strict new record keeping procedures. Non-compliance will likely result in a financial fine and possibly a criminal prosecution.

Companies should be aware of the following information and reporting changes:

How are PSCs defined?

For the majority of companies they will be individuals who:

• Hold 25% or more of the company’s shares and / or voting rights;
• Have the right to appoint or remove the majority of directors.

There are exceptions and if there is an individual that does not immediately meet these criteria, but who still has the right to significant influence or control over the company; or an individual who meets just one of the above criteria but has significant influence or control, they may still be classified as a PSC.

What action is needed?

Between now and 30^th June 2016, companies need to start maintaining records of the PSCs in their organisations.

From the 30^th June, details of all PSCs associated with a company need to be submitted to Companies House with the new confirmation statement. This is an annual document, which replaces the previous annual return.

It’s important to be aware of these requirements and to have identified PSCs for your company before the 30^th June deadline. It will not be acceptable to submit a blank confirmation statement without detailing any PCSs - all companies will have PSCs.

Exceptional circumstances

Due to the sensitivity of being listed on a public register, it is possible for PSCs to request that their details and association with a particular company are not available publically. In these circumstances, the information would only be available to authorised public bodies e.g. police or fraud prevention agencies.

Special permission needs to be granted for information to be withheld and viewable only by authorised persons, based on whether the individual concerned would be at risk as a result of disclosure. A confirmation statement would still need to be filed as normal.

In most cases we recommend the use of a service address, which is a quick and effective means of providing privacy to save a home address being on the public record.

How do the new confirmation statements work?

After 30^th June 2016, a confirmation statement will need to be submitted by every company registered in the UK, directly replacing the current annual return.

To complete the first (and subsequent) confirmation statements you will need to:

• Check the information held by Companies House on the company’s registered office, directors, and location of registers. If these need to be changed, the details can be updated online;
• Update your shareholder information, statement of capital and SIC (standard industry classification) as part of making your confirmation statement;
• Check and confirm all records are up to date;
• Provide details of all the PSCs in the company register;
• Pay the relevant fee.

If there are any changes to the company information at a future date, the information can be updated as many times as necessary, within the single annual fee.

Where we act for clients in their company secretarial matters we will undertake this work on your behalf as part of our annual company secretarial service but if you would like to discuss any of these changes, or need assistance with identifying PSCs at your company, please contact John Davis by emailing j.d@rjp.co.uk.