PSC register introduced to increase trust in company owners with 'significant control'

New rules have come into force today requiring LLPs to publicly reveal all their beneficial owners and controllers for the first time in a bid to increase trust and transparency.

The People of Significant Control (PSC) Register requires individuals with significant control of a UK business to disclose personal information, such as name, service address, nationality, date of birth, and usual residential address.

From 30 June 2016, a company will also be required to file certain PSC information with Companies House as part of its annual confirmation statement (which replaces the annual return).

The measure is the latest step by the government to combat tax evasion, money laundering, and terrorist financing, and will increase transparency over who owns and controls UK companies.

Steve Gale, an audit partner in the professional practices group at Crowe Clark Whitehill, said firms will now need to re-evaluate their management structures.

'LLPs should examine carefully their members' agreements and how they operate, to ensure they take the necessary steps to identify individuals who should be included on the [PSC].

'Whilst the tests for 'ownership' and voting rights will be straightforward for most, there is considerable subjectivity around the other tests. Firms will need to appraise their management and governance structures to identify whether there is an individual who has the power to appoint or remove the majority of those involved in the management of the LLP.'

Gale suggested firms also need to consider if there is an individual who has the power to exercise significant influence, irrespective of that power being exercised.

'Undertaking this exercise will give firms a chance to re-evaluate their governance and management structures, many of which will have been established some time ago.

'Firms may find that certain members of senior management may need to be included within the register notwithstanding that their powers may be limited, ultimately, by the members of the LLP.'