Yorkshire business owners are being urged to consider the implications of major new transparency rules being imposed on nearly all UK companies from April 2016 to combat tax evasion, money laundering and financing terrorism.
The Small Business, Enterprise and Employment Act 2015 – designed to boost trust and promote the UK as a sound business and investment destination – will clarify legal and beneficial ownership.
Michael Cantwell, a partner in the Corporate Department of hlw Keeble Hawson, said: “From this April business owners must keep a register of all people and companies – PSCs – that have a ‘significant control’ over them. This includes those holding more than 25% of the company’s shares or voting rights – along with anyone who has the authority to appoint or remove a majority of the board of directors.
The legislation could hit some firms badly in other ways – for example where PSCs have notoriety or if they work with other, controversial enterprises and customers shun them as a result.
Company officers must take all reasonable steps to pursue PSCs or risk fines or up to two years’ imprisonment and they can impose heavy sanctions against anyone who does not cooperate. Businesses are responsible for collating and compiling a register as well as maintaining and updating records as changes occur.
Michael Cantwell added: “The true impact of the PSC Register remains to be seen – and many companies will be affected in different ways. There is still time to prepare by finding out precisely what obligations you will have, your powers of enforcement – and how you must demonstrate that you are complying from April.”
The new rules apply to all UK companies formed and registered under the UK Companies Acts, except those subject to the disclosure requirements of the DTR 5 (e.g. London Stock Exchange and AIM companies).