The term "persons with significant control" will now become a regular part of the compliance lexicon in the UK.

There are Politically Exposed Persons – PEPs – and now a new acronym for the compliance community to chew over, PSC, or Persons With Significant Control.

A new public register of ownership of UK companies that has taken wing marks the start of a “new era in corporate transparency” and the fight against dirty money, lawyers at Irwin Mitchell Private Wealth say.

From tomorrow, the UK will be the first Group of 20 (G20) country to establish a publicly accessible register showing who really owns and controls UK companies, or PSC. 

The move plays to how policymakers in a number of countries have pushed for registers of beneficial ownership, and similar forms of information, to crack down on dirty money. A vexed issue has been to achieve this goal with respect for legitimate financial privacy. It has been argued that public registers of beneficial ownership are not necessarily the most effective way to proceed. An academic who has studied the issue recently commented on the matter, as reported here. The arrival of the new rule in the UK also highlights how moves arrived at the level of the G20, and other international bodies, are taking effect regardless of the fact that the UK is now contemplating exit from the European Union.

Information about PSCs must be filed annually at Companies House when a company makes its Confirmation Statement (the new form of annual return).  Anyone seeking to incorporate a new company must send a statement of initial significant control to Companies House, alongside the other documents required for incorporation, the firm explained in a commentary on the development.

In exceptional circumstances - where there is a serious risk of violence or intimidation - information relating to a PSC may be kept private but otherwise failure to comply with the regulations will be a criminal offence and restrictions may be placed on the shares or voting rights of the person or entity withholding information to ensure that they provide it.

“The UK is very much leading the way in this drive for increased transparency, as although other EU countries are required to introduce central registers of corporate beneficial owners by 2017, few have gone as far as the UK in making them publicly accessible and have restricted access to competent authorities and “persons who can demonstrate a legitimate interest” to access the information,” Edward Stone, partner at Irwin Mitchell Private Wealth, said.

Someone is defined as a PSC if at least one of the following conditions is satisfied: 

They directly or indirectly own more than 25 per cent of the company’s shares; or

They directly or indirectly hold more than 25 per cent of the voting rights in the company; or

They directly or indirectly have the right to appoint or remove the majority of the board of directors of the company; or

They have the right to exercise, or actually exercises, significant influence or control; or

They have the right to exercise, or actually exercises significant influence or control over the activities of a trust or a firm which is not a legal entity, but would itself satisfy any of the other conditions if it were an individual.