REGISTER OF PERSONS WITH SIGNIFICANT CONTROL
As part of the Small Business Enterprise and Employment Act (SBEE) a new Company Register will be introduced next year which will involve a significant change to how companies are incorporated and administered. All Private Limited Companies, LLP’s and SE’s will be required by law to identify and register all individuals who own or control their company on a Persons with Significant Control Register (PSC).
The register will follow the same procedure as with Register of Members, Directors and other statutory registers in that it will be available for inspection at the Registered Address of the Company and on top of this it will be registered at Companies House and OPEN to the general public. Every Company must have a PSC Register, even if there is nothing to disclose, and a set of standard wording will be required to be input on to the register for those companies who does not have a PSC or cannot identify a PSC. THE PSC REGISTER CAN NEVER BE BLANK.
There could be fines and a prison sentence for those companies who do not comply and to those PSC who do not disclose their interest.
On a company formation the information will need to be disclosed as part of the incorporation process and existing companies will have to declare within set timescales and the register will need to be updated and confirmed as part of the new check and confirm route which will replace the annual return.
WHO IS A PERSON WITH SIGNIFICANT CONTROL
1. Anyone with more that 25% of shares in the company
2. Anyone who has more than 25% of the voting rights in a company
3. Anyone who has the right to appoint or remove the majority of the Board of Directors
4. Anyone who has the right to exercise or can exercise significant influence over the company
5. Where a trust or a firm satisfies one of the above 4 then the person who can exercise significant control over that trust or firm
If the shareholder is a company or a Registered Legal Entity then that company must be declared, there are more complex provisions concerning RLE’s and this will be detailed on Companies House guidelines to the changes which should be available soon.
INFORMATION TO BE PROVIDED
The information that should be given is as follows:-
• Name of PSC
• Service address
• Date of Birth
• Residential address
• Date on which the PSC obtained control
• Nature of his/her control
Please note that a separate Register of PSC residential addresses will be required for manual records kept at the Registered Address.
There will be different information required for a Registered Legal Entity.
SUPPRESSION OF INFORMATION
Individuals can apply to Companies House for suppression of information on the public register but this has not been formally set out and the likelihood is that the information will be similar to the Director’s information that can be suppressed and may include companies in controversial sectors, religious and political sectors and asset stripping situations for foreign investors plus any individual at risk of serious harm.
WHAT DOES A COMPANY NEED TO DO?
• A company will be required to identify all PSC and obtain their information – the law says that you must take all reasonable steps to identify the individuals. A notice to all PSC must be sent to the individuals requesting the information.
• Complete the details onto a PSC Register and provide a copy to Companies House as part of the check and confirm procedure
• Update the information on your register and the Companies House Register when the information changes
DATES OF IMPLEMENTATION
APRIL 2016 This is when the change will be implemented and any person requiring suppression will need to register. The information will also be required as part of the Company formations procedure.
30 JUNE 2016 All existing companies will need to register and they will have a year to provide the information as part of the check and confirm return.
Companies House were fairly silent on how the new procedure will be policed and they did indicate that they would be fairly lenient in the first year but they would be taking a stronger view with non-compliance of the rules and following up on companies who have not supplied information.
This would, of course, have an effect on all companies where we act as a nominee shareholder and we will be contacting these clients shortly with regard to this service once we have discussed the act with our lawyers.
FIRST ORDER SECRETARIAL SYSTEM
Our First Order Secretarial system will be updated to include the new Registers next year. For more information on our cloud based company administration system please contact Paul at Paul@fcls.co.uk
CHECK AND CONFIRM
The new Check and Confirm return will replace the Annual Return from June 30th 2016. All Companies will be required annually or at any time during the year to check their information, confirm that all is correct and pay a duty fee to Companies House. It has not been confirmed what the fee will be. The new PSC Register will be included in the first year.
We believe that most companies will maintain the same date as the annual return date and still file annually on that date, but anyone making an appointment or allotment in the year will have an option to file a check and confirm return at that date.
First Corporate can now provide shareholder agreements, partnership agreements and service agreements. The fee is £750 plus vat and we will provide a full questionnaire for completing and then a draft agreement along with any articles and adoption pack to support the agreement. For further information please contact Steve at email@example.com or Graham at firstname.lastname@example.org
NEW DIVIDEND TAXATION RULES
The existing system of tax credits will be abolished in April 2016, and replaced by a simpler system.
After the personal allowance has been taken into account (£11,000 from April 2016 if you are entitled to the entire amount), all individuals will be able to receive £5,000 of dividend income with no tax liability at all.
If your entire income is £16,000 or less, you will pay no dividend tax at all.
New dividend tax bands will be created and will apply to all dividend income in excess of £5,000 per year.
• 7.5% (basic rate)
• 32.5% (higher rate)
• 38.1% (additional rate)
However, the Treasury have since advised that the £5,000 dividend ‘allowance’ is actually a zero rate tax band only for dividend income, and it will form part of the £32,000 Basic Rate Band (BRB) next year. This will mean that individuals will be taxed more on their dividend income.
A possible way of reducing this is to create a share class structure and to maybe divert some income to family members.
First Corporate can arrange a full share restructure pack and articles for £145 plus vat. Please contact Steve@fcls.co.uk
FOR FURTHER INFORMATION ON THE ABOVE PLEASE CONTACT STEVE OR GRAHAM AT email@example.com or firstname.lastname@example.org
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This post was written by Steve Blackmore