02 May 2017

Companies House published its strategic plan for 2017-2020 and its business plan for 2017-2018 on 19 April 2017. The business plan notes that the Fourth Money Laundering Directive (“4MLD”) will be implemented by the end of June this year.

The effect of transposition of 4MLD is to ensure that the UK’s anti-money laundering and counter terrorist financing regime is kept up-to-date and effective. One of the ways in which Companies House aims to achieve this is through increasing the transparency of ownership and control of companies registered in the UK.

How might this affect your business?

Companies

As of 26 June 2017 any changes regarding the ownership and control of a company must be notified to Companies House using new forms PSC01 to PSC09 rather than through the confirmation statement.

PSC register

Currently certain UK companies and LLPs are obliged to maintain a PSC register. A PSC register is a register of individuals or legal entities that have significant control over a company (“people with significant control” or “PSCs”) and is designed to (i) ensure that individuals (or entities) who are the ultimate owners or controllers of a company are identified and details of their interests made public and (ii) deter and impose sanctions on those who hide their interests. A PSC is a person or legal entity which:

• owns more than 25% of a company’s shares;
• holds more than 25% of a company’s voting rights;
• holds the right to appoint or remove the majority of directors;
• has the right to, or actually exercises significant influence or control; or
• holds the right to exercise or actually exercises significant control over the activities of a trust or firm (which is not a legal entity) but would itself satisfy any of the above conditions if it were an individual.

Exemptions

The current PSC regime exempts companies from the requirement to maintain a PSC register if they are subject to Chapter 5 of the Financial Conduct Authority's Disclosure Guidance and Transparency Rules (“DTR 5”). DTR 5 applies to UK companies with shares traded on a regulated market (such as the main market of the London Stock Exchange), as well as to companies with shares traded on a prescribed market like AIM. The reasoning behind this exemption was that these companies are subject to sufficiently similar disclosure requirements to DTR issuers, and that this information is publicly accessible. However, as a result of the implementation of 4MLD this exemption will no longer apply to DTR 5 companies unless they are traded on an EEA market or on specified markets in the USA (including NASDAQ and the NYSE), Switzerland, Japan and Israel.

Scottish Limited Partnerships (“SLPs”)

From 24 July 2017 active SLPs must register their PSC information. SLPs will have 14 days to inform Companies House of any changes to its ownership structure and must confirm that the information held by the registrar is correct annually.

Scottish Partnerships (“Partnerships”)

Partnerships will also be under an obligation to file a PSC register from 24 July if all its partners are corporate bodies. As with SLPs, Companies House must be informed of any changes within 14 days and confirm that the information held is correct every year.

Protection regime

A protection regime currently exists under which a company may, on behalf of a PSC, apply to the registrar requiring the registrar to refrain from publicly disclosing information about the PSC if the company reasonably believes that disclosure will result in a serious risk of the PSC being subjected to violence or intimidation. This protection will be extended to SLPs and Partnerships.

Regardless of whether or not an entity’s information is disclosed on the public register, PSC information still must be submitted to Companies House and specified public authorities will be able to access the information on request. The ability to access PSC information on request will be widened to include credit and financial institutions.

Plan ahead

If you think your business may be affected by these changes you should review and consider your current ownership structures ahead of the implementation dates.

Link to press release: https://www.gov.uk/government/news/changes-to-uk-anti-money-laundering-measures

Contact: Jeremy Glen, Partner jsg@bto.co.uk T: 0141 221 8012.