From 6 April 2016, UK companies and limited liability partnerships (LLPs) will be required to hold, and maintain a register of people with significant control (“PSC Register”). They will also be required to file this information with Companies House from 30 June 2016.
This reflects the UK government’ commitment to increase transparency of company ownership and control.
Overseas companies with UK subsidiaries (but not those which only have UK branches) need to be aware of the regime, as each of their UK subsidiaries will be required to keep a PSC register and, as with any other company within the scope of the regime, will need to obtain the information needed to complete the register.
I was recently asked by a client who is the in-house lawyer of an international group with a UK operating subsidiary, whether they were required to disclose the ultimate equity holders (both non-UK individuals) of the group.The question is: What are the PSC disclosure requirements for the owners foreign companies with UK subsidiaries?
Detailed guidance on the PSC regime can be found here: CLICK HERE FOR DETAILED GUIDANCE ON THE PSC REGIME
A UK company (and its directors) controlled by an overseas person may find themselves in a difficult position if that overseas person who does not fall within UK jurisdiction refuses to comply for whatever reason.
The starting point is to look at the Indirect ownership requirements under 5.4.4 of the above-mentioned PDF guidance document.
Company is required to enter the details of all RLEs (Registerable Legal Entities) on the register.
When a legal entity is not an RLE it is not registrable and a company cannot enter it on the PSC register.
If the shareholder is a foreign company, under 5.4.5, one notes that it states that a legal entity is not an RLE if they are a non-UK company or other legal entity that does not meet the test in paragraph 2.2.2 of the guidance document.
These rules are tightly drawn and they contain anti-avoidance provisions so where a company falls outside of the RLE rules (e.g. a foreign company) which therefore cannot be included in its PSC Register, one must look through such foreign company and register the individual(s) behind it as a PSC in the PSC Register.
This was my advice to my client. I hope you find it useful too!
For further information on the matters highlighted in this posting, please contact Jonathan Abrams, Head of Business Client Services or your usual Gregory Abrams Davidson LLP contact.
Jonathan Abrams, Partner
T +44 (0)208 004 7016