Companies House have announced that, in accordance with the EU’s Fourth Money Laundering Directive, the Persons with Significant Control (PSC) regime will be extended further. Under the changes, additional entities will now also be required to submit PSC information to Companies House and there will also be changes as to how and when PSC updates have to be provided.
The Fourth Money Laundering Directive ((EU) 2015/849) (4MLD) must become UK law by 26 June 2017. The 4MLD requires, amongst other things, that member states put in place a central register to record the beneficial ownership of a company or Limited Liability Partnership (LLP) with a view to improving transparency over who actually owns and has control of a corporate entity and discouraging the use of such entities for money laundering and other criminal activities.
Since April 2016, most UK companies and all UK LLPs have had to keep a register of persons with significant control. This information must be provided to Companies House on incorporation or, for existing companies, as part of their annual confirmation statement. All information provided is publically available.
The 4MLD goes further than the existing PSC regime. As a result, changes will need to be made to the PSC regime to bring it fully into line with the requirements imposed by the 4MLD. The key changes are as follows:
- It is proposed that a company’s PSC information will no longer be updated as part of the confirmation statement process. As confirmation statements are filed annually, the information available to the public could potentially be a year out of date. Instead, entities obliged to keep a PSC register will need to update their register within 14 days of any change and then file specific Companies House form within another 14 days of that date. This is a major change and highlights the need for entities to be aware of what is happening in their ownership structures.
- 4MLD considerably widens the scope of the existing PSC regime, extending it to include more entities in order for the UK to be fully compliant. It is therefore proposed that Scottish Limited Partnerships and General Scottish Partnerships will be brought into the PSC regime. It is also being considered whether AIM listed companies and London Stock Exchange listed companies, which were originally exempt from the regime, should fall within the scope of the PSC regime.
Draft regulations to effect the proposed changes have not yet been published and the full extent and application of any changes is currently unknown.
Those companies and LLPs whose confirmation statements fall during the period between 26 June and 29 June will straddle both the old and revised regimes, because of the date of the legislation. We expect that Companies House will contact those affected to advise how to ensure compliance.