Member Article

Companies Are In The Dark About Shareholder Obligations

LARGE numbers of businesses are unaware of major legislative changes that mean anyone with significant control in a company now has to be registered at Companies House, according to LCF Law’s corporate division.

From 6th April 2016, changes to the Companies Act 2006 mean UK based companies and LLPs have to create and maintain a register of all people with significant control (PSC) over the entity. The PSC Register must also be filed at Companies House as part of the company’s Confirmation Statement, which replaced the Annual Return from 30th June 2016.

A PSC is any individual who owns more than 25% of the shares or voting rights in a company, or who has the right to appoint or remove the majority of company directors. Alternatively, anyone who can exercise significant control over a company or trust is also classed as a PSC. Any companies without a PSC are still required to create a register stating this fact and the register must be updated on an ongoing basis, as the information changes.

Clementine Duckett a partner in LCF Law’s corporate team, explains: “Lots of local companies that we talk to are still completely unaware of this new legislation despite the fact that failure to comply can mean the company and its directors are committing a criminal offence.

“The creation of a PSC register is part of an ongoing drive towards improved transparency in the business world, and means details of all individuals who own and control companies are made public. It is envisaged that this will help to combat everything from tax fraud to money laundering.”

Clementine adds: “Any companies that are unsure about their legal obligations and how this applies to them should seek professional advice as soon as possible. Most good solicitors will offer free PSC register templates that act as a great starting point towards compliance and ensuring that companies stay on the right side of the law.”

LCF Law is a leading commercial law firm that works with both businesses and private individuals. The long-established firm employs more than 130 people across offices in Leeds, Bradford, Harrogate and Ilkley.

This was posted in Bdaily's Members' News section by Steven Wright .