New duty to disclose all major shareholders interests
A law passed last month requires public disclosure of major interests in UK companies. The new Persons with Significant Control (PSC) Register needs to include details of anyone with an interest of 25% or more and the information will be publicly available and free to access online.By David Gorton, head of corporate services at PM+M Solutions for Business LLP.
The need for the new rules comes from the UK Government’s commitment to promoting corporate transparency at recent G8 and G20 Summits. The Small Business, Enterprise and Employment Act 2015 (SBEEA) starts having an effect next month, but will not be fully implemented until April 2016, giving individuals and companies time to take reasonable step towards compliance.Anyone who doesn’t take reasonable steps to comply with the new rules may be convicted of a criminal offence, with the penalties including a prison sentence and disqualification from directorship. PSC will also be responsible for disclosing any interests or shares they may have in a directly or indirectly competing company to their current employer or fellow directors.
The government’s target of clamping down on money laundering and tax evasion may have significant commercial issues for many businesses in the UK. It is not uncommon to seek to keep an investment confidential, especially in an early stage business which may shake up a market and upset your existing customers or suppliers. The new rules will add more complications for entrepreneurs seeking to abide by the rules while not necessarily deterring those happy to break them.
Other changes to SBEEA include the bearer share being abolished. The change means that a physical stock certificate will no longer be required to be held by the equity owner as a part of holding the shares.