The new PSC Register – is your company &/or company charity prepared ?
Most charity trustees will not be aware of the new Small Business Enterprise and Employment Act 2015 (the ‘Act’) that is part of the Government’s new transparency regime. It adds a new and complex requirement into the Companies Act 2006 for most UK companies (including charitable companies !, and their trading subsidiaries) to create, populate and maintain a new type of statutory register called the PSC (‘people with significant control’) register.
From 6 April 2016 most companies will need to set-up their PSC register and identify whether they have any PSCs , and from 30 June 2016 the PSC information will have to be made available at Companies House (as part of the new confirmation statement regime that will replace the annual return).
Some companies will be exempt from the regime, (shares are traded on certain regulated markets) – however any exemptions are unlikely to extend to charities.
So, how will the new obligations impact your charity ?. In practice this will vary widely depending on the structure of the charity, and in particular the membership of the charity. One of the criteria for being a PSC is holding more than 25% of the voting rights in the company, so clearly where there is a membership of 4 or more, there is no PSC, applying that test. But all company charities will need to consider whether the regime catches them, and if so, to what extent.
As they say, this is certainly “OTT” (over the top). Why ?….to disclose the beneficial owners of companies, is simply not appropriate for charitable companies which have a completely difference concept of ‘ownership’ to other companies. The administrative burden imposed on companies and complexity of the PSC regime, coupled with the various criminal sanctions that come with it, is, in my opinion, quite inappropriate for the charity sector.