Employment law

Why micro business owners must declare people with significant control

Fred Heritage | 7 April 2016 | 8 years ago

 

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People with significant control must be declared when firms issue annual statements to Companies House after 30 June
In an attempt to tackle abuse of corporate structures and create an environment of trust and accountability around British business, the government requirement that companies must hold a register of people with significant control (PSC) came into force on 6 April.

From 30 June 2016, unlisted UK companies of any size as well aslimited liability partnerships will need to submit a register including information about the individuals who own or control companies including their name, date of birth, nationality and details of their interest in the business. This information will need to be declared when firms issue annual statements to Companies House.

According to government guidelines, a person of significant control is an individual that holds more than 25 per cent ownership or voting rights in a company, or who has the right to appoint or remove the majority of a director board.

Commenting on the new measure, business minister Baroness Neville Rolfe said: Companies that disguise who owns or controls them are not playing by the rules and have something to hide. This register is the first of its kind in the world and will help us tackle abuse of corporate entities.

First introduced as part of the Small Business, Enterprise and Employment Act 2015, the register’s effectiveness and scope will be reviewed by the government in 2019.

The register recognises that some features of company structures that create a positive business environment also attract criminal activity. Companies can be misused and structures abused to facilitate a range of illegal activities like money laundering, tax evasion and terrorist financing.

Want to know how to better protect your micro business from a cyber security breach? Read on.

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