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New Rules Effective Under UK Companies Act

From April 6, 2016 United Kingdom-based companies and Limited Liability Partnerships must keep a register identifying “persons of significant control” (PSC) available for inspection. Effective June 20, 2016, such companies must file PSC information with the Companies House by making an annual confirmation statement.  These mandates arise out of the Small Business Enterprise and Employment Act 2015, amending the Companies Act 2006, and are intended to increase the transparency of ownership of UK-based legal entities. The definition of a PSC includes an individual who holds more than 25% of the shares or voting rights of the company, has the right to appoint or remove a majority of the directors or exercise significant control over the company, or has the right to exercise significant control over the activities of a trust or firm which is not a legal entity but would itself satisfy the other listed conditions if it were an individual.  Some of these conditions can be met either directly or indirectly, and the determination of whether an individual or entity exercises “significant control” is fact specific.

UK Ally Law

The Act details what information must be included in the mandatory register, as well as maintenance and update requirements. If your company falls under the obligations of the Act, contact an attorney at an Ally Law member firm to determine which information you need to collect and incorporate into your register.  If you are not sure whether the Act applies to your company, contact an Ally Law member firm to undertake the analysis and assure your compliance with UK laws.  Ally Law member firms can guide you through compliance with applicable companies’ laws in any jurisdiction in which you do business.  For more information about our services in this area, contact us at yourally@ally-law.com.

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By Edwin Coe.