On 26 June 2017 the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 came into force in the United Kingdom.
Companies House have stated that the purpose of this legislation is to increase the transparency surrounding who owns and controls companies in the UK. Business owners are advised to be aware of these changes. We also advise reviewing your Persons of Significant Control (PSC) Register to ensure it is up to date.
The previous position
Since 6 April 2016, UK companies have been obligated, through filing their annual confirmation statement (formerly ‘annual return’), to disclose to Companies House who the persons of significant control are in respect of their business. This obligation required businesses to undertake an analysis of persons of significant control as well as maintain a register in their company books alongside the annual reporting obligation.
The new position
From 26 June 2017 businesses will no longer be able to choose to wait until their next confirmation statement to update Companies House. Under the new regulations, companies are obligated to update Companies House every time there is a change.
In practical terms, this means that every time your business participates in a transaction that, for example, impacts the percentage shareholdings in your business and affects the PSC position, it is now necessary to update the PSC register within 14 days of the triggering transaction. There will be another 14 days to send the information to Companies House using the relevant PSC forms.
What happens if I do not comply?
Failure to provide accurate information on the PSC register and failure to comply with notices requiring someone to provide information are criminal offences which may result in a fine and/or a prison sentence of up to two years.