Small Business, Enterprise and Employment Act 2015: PSC Register and other changes This note sets out some of the significant changes that the Small Business, Enterprise and Employment Act 2015 (the “Act”) will bring into effect. The headline change will be the introduction of an obligation for companies to keep a register of persons with significant control in a company (a “PSC Register”) ensuring that these individuals are identified and details of their shareholdings are made public.
1) Who is a Person with Significant Control (a “PSC”)?
Broadly, a PSC is an individual or legal entity that meets one or more of the following five conditions:
·    directly or indirectly holds more than 25% of the share capital; or
·    directly or indirectly controls more than 25% of the votes at shareholder  meetings; or
·    directly or indirectly controls (or able to control) the appointment or removal of a majority of the board; or
·    actually exercises, or has the right to exercise, significant influence or control over the company; or
·     actually exercises or has the right to exercise significant influence or control over any trust or firm (which is not a legal entity) which has significant control (under one of the four conditions above) over the company.
2) What information is recorded on the PSC Register?
For individuals, certain personal information will need to be disclosed including name, service address, nationality, date of birth and usual residential address. For legal entities, the corporate or firm name, its registered office, legal form, the law by which it is governed, its company number and details of the company registry it is registered with (e.g. Companies House) must be disclosed.
In addition, where an individual or legal entity meets either of the first two conditions in point 2 above, the broad extent of their holding of shares or votes must be disclosed by selecting one of three bands:
·   greater than 25% but less than or equal to 50%;
·    greater than 50% but less than 75%; or
·    greater than or equal to 75%.
3) Which companies does the PSC Register obligation apply to?
The new rules apply to all UK companies except those listed on the LSE main market, AIM companies and companies with voting shares admitted to trading on a “regulated market” in an EEA state other than the UK or on certain specified markets in Switzerland, the United States, Japan and Israel. 
4) When must a company make the PSC Register available by?

Those entities subject to the new requirements will be required to maintain a PSC Register from 6 April 2016 and, from 30 June 2016, will be required to include this information in their confirmation statement (see below) at Companies House.

5) How will the PSC Register be made available to the public?

A company's PSC Register must be kept at its registered office and be available for public inspection (or at an alternative address where it is available for public inspection). The information on the PSC Register will also need to be confirmed to Companies House at least every 12 months and will be held by it on a publicly searchable database. It will be possible to hold the PSC Register at Companies House.

6) Are there penalties for non-compliance?
Each company has a duty to take reasonable steps to find out and identify if anyone is a registrable person or legal entity in relation to it.
There are criminal penalties (imprisonment of a fine) for non-compliance with these duties for companies and their officers and the individuals or relevant legal entities concerned. 
Failure by an individual or legal entity to respond to a company's enquiries will give the company the ability (without a court order) to restrict voting rights, and impose other restrictions on, any shares held by them.
7) Are there any exceptions?
If an individual PSC considers themselves (or people they live with) to be at serious risk of violence or intimidation either as a result of the activities of the company, or as a result of the activities of the company when combined with particular attributes or characteristics of the individual concerned, these individuals have the right to apply (on or before 30 June 2016) to prevent any of their details on the PSC Register being made public.
The most up to date versions of relevant guidance issued from the government can be found by clicking here.
8) Other significant corporate matters from the Act:
·                     Abolition of bearer shares
The Act sets out transitional arrangements for the mandatory cancellation or conversion of existing bearer shares.
·                     Corporate directors
From October 2016, companies may no longer have corporate directors (i.e. other companies or entities that act as directors) unless they fall within the applicable exceptions. There is a 12 month period within which to remove/replace a corporate director after which time the appointment will automatically cease.
·                     Annual return filing:
From June 2016, Companies will no longer be required to submit an annual return; instead companies will be required to deliver a “confirmation statement” at least annually, stating that the Company has delivered all the required information to Companies House in the last 12 months.
·                     Central register
From April 2016, private companies will have the option of keeping information that must be recorded in certain statutory registers (e.g. register of members and PSC Register etc.) on the public register at Companies House instead of in those statutory registers.
For guidance on the compilation and maintenance of the PSC Register and a company’s adherence with any other matters brought about by the Act please contact Charles Gerada (cgerada@clintons.co.uk), Chris Coates (ccoates@clintons.co.uk) or Rob Jones (rjones@clintons.co.uk) at Clintons.
Article by Chris Coates