No doubt you are familiar with the new “People with significant control” filing requirements?
You may have noticed that failure to comply with the new regulations is a criminal offence: fines or up to two years at Her Majesty’s pleasure. In addition to these penalties, if a potential PSC refuses to co-operate, voting rights attached to shareholdings may be suspended.
The three main definitions of a PSC are:
- A person who holds more than 25% of shares in a company.
- A person who holds more than 25% of the voting rights, and
- An individual who holds the right to appoint or remove the majority of the board of directors of the company.
The last definition will likely lead to head-scratching by the person who is tasked with adding names to the company’s PSC register. In the notes published by Gov.uk you are advised to:
“Look at your company’s constitution, including articles of association, and identify whether anyone has this right. If there is only one director and someone has the right to appoint them, then they would meet this condition.”
Then there are conditions 4 and 5…
- An individual who has the right to exercise, or actually exercises, significant influence or control over the company. Should we be concerned with the in-laws here?
- Where a trust or firm would satisfy one of the first four conditions if it were an individual. Any individual holding the right to exercise, or actually exercising, significant influence or control over the activities of that trust or firm.
Just when the Office for Tax Simplification was easing headaches and achieving real simplification in matters tax, along comes a new acronym to persecute. It will be a significant chore to update company registers and make sure that the relevant details are filed with the souped-up replacement for the Annual Return from July 2016. Is this a billing opportunity? How do we communicate the value in this service, without stressing the 2 years inside?
Surely this was intended to deal with the opaque shiftiness of large corporations? Now the national red-tape indicator has taken a surge in the upward direction and it will be smaller businesses that will be required to bend a knee to yet more regulation.