All companies, including charitable companies and Community Interest Companies, must now have a register of ‘people with significant control’ (PSC register) of individuals and legal entities which have “significant influence or control” over them.
The regulations came in from 6th April – we’ve been waiting for a briefing with a sector focus, and now two come along at once!
Sandy Adirondack’s Legal Update is probably the one to go for. She points out there must be a register even if there are no PSCs, or even if the company is dormant although the rules should be relatively straightforward for most voluntary organisations.
Accountancy firm UHY Hacker Young’s charity sector blog on the PSC register is also worth checking. This makes clear that Charitable Incorporated Organisations will not need to maintain a register, but “The position for trading subsidiaries of CIOs is unclear”.
Both highlight that the purpose of these regulations is around corporate transparency,
by creating a full picture of both the legal and beneficial ownership of businesses, with the aim of combating tax evasion, money laundering and the financing of terrorist activities.
There is a strong question whether this is appropriate for charitable companies which have a completely different concept of ‘ownership’ to others. Action by all incorporated charities is still required, however.
From June 2016 you will need to file details of your PSC register with Companies House at least annually on your Confirmation Statement (Confirmation Statements have replaced annual returns from June 2016 and the details will be available at Companies House).
Many Locality members (indeed most charities) “won’t have a person with significant control but you still need to create a register”. And a charity may well itself be a ‘person with significant control’, in controlling a trading company offshoot.