To PSC or Not to PSC…

12-09-2016

From 6 April 2016, the requirement for UK companies and LLP’s to consider and if appropriate maintain a new statutory register was introduced as a result of changes to the Small Business, Enterprise and Employment Act 2015. In this article I consider a few of the questions and queries we have received from charities as to the new requirements and how they may be affected by them.

 

  1. I am a trustee of a charity. I’ve heard that there is a new legal requirement for organisations to have a PSC Register. What is it?
  2. A PSC register is a list of “people with significant control”. With effect from April 2016, all companies are required to have a PSC register. This applies to charitable companies and CICs. It also applies to trading companies (which are often used by charities for activities such as fundraising).

The PSC register contains personal details including a person’s name, address, date of birth, nationality, and information about the control they have over the company.

  1. What is a person with “significant control”?

In the context of a charity, anyone who meets one or more of the following criteria must be includes on the PSC register:

For example, if your charity has three members, who each have 33% of the voting rights, they all must be named on the PSC register.

Note that employees are not persons with significant control.

  1. My charity is a CIO (Charitable Incorporated Organisation). Do we need a PSC register?
  2. No, the rules do not apply to CIOs, trusts or unincorporated associations – only to companies. However, sometimes non-company charities have significant influence over another charity, in which case the trustees of the non-company charity might need to go on the other charity’s PSC register.
  3. What must we do with our PSC register?

Keep it with your company books and provide it to Companies House with your annual confirmation Statement (Annual Return).

  1. What happens if we don’t have a PSC register?
  2. Failure to comply is a criminal offence. You could be liable to pay a fine and there are further penalties for failure to keep an accurate register and failure by the PSC to provide information.

The above is just a small snapshot of the queries we have received from charity clients following the introduction of the new requirements. Obviously every organisation is unique and will be affected by (and will need to react to) the rules in different ways. However, given the serious sanctions which can be imposed for non-compliance, it is crucial that charities and their trustees obtain legal advice to ensure they are fully compliant.


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