Small Business, Enterprise and Employment Bill (HC Bill 117)

790C Key terms

(1) This section explains some key terms used in this Part.

(2) References to a person with (or having) “significant control” over a
company are to an individual who meets one or more of the specified
5conditions in relation to the company.

(3) The “specified conditions” are those specified in Part 1 of Schedule
1A.

(4) It does not matter whether the individual meets the condition alone
or as one of a number of joint holders of the share or right in question,
10for example as one of a number of trustees of a trust or members of a
firm that is not a legal person.

(5) Individuals with significant control over a company are either
“registrable” or “non-registrable” in relation to the company—

(a) they are “non-registrable” if they have that control by virtue
15only of having significant control over some other legal entity
that is a “relevant legal entity” in relation to the company;

(b) otherwise, they are “registrable”,

and references to a “registrable person” in relation to a company are
to an individual with significant control over the company who is
20registrable in relation to that company.

(6) Subsections (2) to (4) and Schedule 1A apply in determining under
subsection (5) whether someone has significant control over some
other legal entity (reading references in those provisions to the
company as references to that other entity).

(7) 25A “legal entity” is a body corporate or a firm that is a legal person
under the law by which it is governed.

(8) In relation to a company, a legal entity is a “relevant legal entity” if—

(a) it would have come within the definition of a person with
significant control over the company if it had been an
30individual, and

(b) it is subject to its own disclosure requirements.

(9) A legal entity is “subject to its own disclosure requirements” if—

(a) this Part applies to it (whether by virtue of section 790B or
another enactment that extends the application of this Part),

(b) 35it is a DTR5 issuer,

(c) it is of a description specified in regulations under section
790B (or that section as extended), or

(d) it is of a description specified by the Secretary of State by
regulations made under this paragraph.

(10) 40A relevant legal entity is either “registrable” or “non-registrable” in
relation to a company—

(a) it is “non-registrable” if subsection (8)(a) applies in respect of
it by virtue only of it having significant control over some
other legal entity that is also a relevant legal entity in relation
45to the company;

(b) otherwise, it is “registrable”,

and references to a “registrable relevant legal entity” in relation to a
company are to a relevant legal entity which is registrable in relation
to that company.

(11) The register that a company is required to keep under section 790M
5(register of people with significant control over a company) is
referred to as the company’s “PSC register”.

(12) In deciding whether to specify a description of legal entity under
paragraph (d) of subsection (9), the Secretary of State is to have
regard to the extent to which entities of that description are bound by
10disclosure and transparency rules (in the United Kingdom or
elsewhere) broadly similar to the ones applying to an entity falling
within any other paragraph of that subsection.

(13) Subject to express provision in this Part and to any modification
prescribed by regulations under this subsection, this Part is to be
15read and have effect as if each of the following were an individual,
even if they are legal persons under the laws by which they are
governed—

(a) a corporation sole,

(b) a government or government department of a country or
20territory or a part of a country or territory,

(c) an international organisation whose members include two or
more countries or territories (or their governments),

(d) a local authority or local government body in the United
Kingdom or elsewhere.

(14) 25Regulations under this section are subject to negative resolution
procedure.

CHAPTER 2 Information-gathering

Duty on companies

790D Company’s duty to investigate and obtain information

(1) 30A company to which this Part applies must take reasonable steps—

(a) to find out if there is anyone who is a registrable person or a
registrable relevant legal entity in relation to the company,
and

(b) if so, to identify them.

(2) 35Without limiting subsection (1), a company to which this Part applies
must give notice to anyone whom it knows or has reasonable cause
to believe to be a registrable person or a registrable relevant legal
entity in relation to it.

(3) The notice, if addressed to an individual, must require the
40addressee—

(a) to state whether or not he or she is a registrable person in
relation to the company (within the meaning of this Part), and

(b) if so, to confirm or correct any particulars of his or hers that
are included in the notice, and supply any that are missing.

(4) The notice, if addressed to a legal entity, must require the
addressee—

(a) to state whether or not it is a registrable relevant legal entity
in relation to the company (within the meaning of this Part),
5and

(b) if so, to confirm or correct any of its particulars that are
included in the notice, and supply any that are missing.

(5) A company to which this Part applies may also give notice to a
person under this section if it knows or has reasonable cause to
10believe that the person—

(a) knows the identity of someone who falls within subsection
(6), or

(b) knows the identity of someone likely to have that knowledge.

(6) The persons who fall within this subsection are—

(a) 15any registrable person in relation to the company;

(b) any relevant legal entity in relation to the company;

(c) any entity which would be a relevant legal entity in relation
to the company but for the fact that section 790C(8)(b) does
not apply in respect of it.

(7) 20A notice under subsection (5) may require the addressee—

(a) to state whether or not the addressee knows the identity of—

(i) any person who falls within subsection (6), or

(ii) any person likely to have that knowledge, and

(b) if so, to supply any particulars of theirs that are within the
25addressee’s knowledge, and state whether or not the
particulars are being supplied with the knowledge of each of
the persons concerned.

(8) A notice under this section must state that the addressee is to comply
with the notice by no later than the end of the period of one month
30beginning with the date of the notice.

(9) The Secretary of State may by regulations make further provision
about the giving of notices under this section, including the form and
content of any such notices and the manner in which they must be
given.

(10) 35Regulations under subsection (9) are subject to negative resolution
procedure.

(11) A company is not required to take steps or give notice under this
section with respect to a registrable person or registrable relevant
legal entity if—

(a) 40the company has already been informed of the person’s
status as a registrable person or registrable relevant legal
entity in relation to it, and been supplied with all the
particulars, and

(b) in the case of a registrable person, the information and
45particulars were provided either by the person concerned or
with his or her knowledge.

(12) A person to whom a notice under subsection (5) is given is not
required by that notice to disclose any information in respect of

which a claim to legal professional privilege (in Scotland, to
confidentiality of communications) could be maintained in legal
proceedings.

(13) In this section—

(a) 5a reference to knowing the identity of a person includes
knowing information from which that person can be
identified, and

(b) “particulars” means—

(i) in the case of a registrable person or a registrable
10relevant legal entity, the required particulars (see
section 790K), and

(ii) in any other case, any particulars that will allow the
person to be contacted by the company.

790E Company’s duty to keep information up-to-date

(1) 15This section applies if particulars of a registrable person or
registrable relevant legal entity are stated in a company’s PSC
register.

(2) The company must give notice to the person or entity if the company
knows or has reasonable cause to believe that a relevant change has
20occurred.

(3) In the case of a registrable person, a “relevant change” occurs if—

(a) the person ceases to be a registrable person in relation to the
company, or

(b) any other change occurs as a result of which the particulars
25stated for the person in the PSC register are incorrect or
incomplete.

(4) In the case of a registrable relevant legal entity, a “relevant change”
occurs if—

(a) the entity ceases to be a registrable relevant legal entity in
30relation to the company, or

(b) any other change occurs as a result of which the particulars
stated for the entity in the PSC register are incorrect or
incomplete.

(5) The company must give the notice as soon as reasonably practicable
35after it learns of the change or first has reasonable cause to believe
that the change has occurred.

(6) The notice must require the addressee—

(a) to confirm whether or not the change has occurred, and

(b) if so—

(i) 40to state the date of the change, and

(ii) to confirm or correct the particulars included in the
notice, and supply any that are missing from the
notice.

(7) Subsections (8) to (10) of section 790D apply to notices under this
45section as to notices under that section.

(8) A company is not required to give notice under this section if—

(a) the company has already been informed of the relevant
change, and

(b) in the case of a registrable person, that information was
provided either by the person concerned or with his or her
5knowledge.

790F Failure by company to comply with information duties

(1) If a company fails to comply with a duty under section 790D or 790E
to take steps or give notice, an offence is committed by—

(a) the company, and

(b) 10every officer of the company who is in default.

(2) A person guilty of an offence under this section is liable—

(a) on conviction on indictment, to imprisonment for a term not
exceeding two years or a fine (or both);

(b) on summary conviction—

(i) 15in England and Wales, to imprisonment for a term not
exceeding twelve months or a fine (or both);

(ii) in Scotland, to imprisonment for a term not exceeding
twelve months or to a fine not exceeding the statutory
maximum (or both);

(iii) 20in Northern Ireland, to imprisonment for a term not
exceeding six months or to a fine not exceeding the
statutory maximum (or both).

Duty on others

790G Duty to supply information

(1) 25This section applies to a person if—

(a) the person is a registrable person or a registrable relevant
legal entity in relation to a company,

(b) the person knows that to be the case or ought reasonably to
do so,

(c) 30the required particulars of the person are not stated in the
company’s PSC register,

(d) the person has not received notice from the company under
section 790D(2), and

(e) the circumstances described in paragraphs (a) to (d) have
35continued for a period of at least one month.

(2) The person must—

(a) notify the company of the person’s status (as a registrable
person or registrable relevant legal entity) in relation to the
company,

(b) 40state the date, to the best of the person’s knowledge, on
which the person acquired that status, and

(c) give the company the required particulars (see section 790K).

(3) The duty under subsection (2) must be complied with by the end of
the period of one month beginning with the day on which all the
45conditions in subsection (1)(a) to (e) were first met with respect to the
person.

790H Duty to update information

(1) This section applies to a person if—

(a) the required particulars of the person (whether a registrable
person or a registrable relevant legal entity) are stated in a
5company’s PSC register,

(b) a relevant change occurs,

(c) the person knows of the change or ought reasonably to do so,

(d) the company’s PSC register has not been altered to reflect the
change, and

(e) 10the person has not received notice from the company under
section 790E by the end of the period of one month beginning
with the day on which the change occurred.

(2) The person must—

(a) notify the company of the change,

(b) 15state the date on which it occurred, and

(c) give the company any information needed to update the PSC
register.

(3) The duty under subsection (2) must be complied with by the later
of—

(a) 20the end of the period of 2 months beginning with the day on
which the change occurred, and

(b) the end of the period of one month beginning with the day on
which the person discovered the change.

(4) “Relevant change” has the same meaning as in section 790E.

25Compliance

790I Enforcement of disclosure requirements

Schedule 1B contains provisions for when a person (whether an
individual or a legal entity) fails to comply with a notice under
section 790D or 790E or a duty under section 790G or 790H.

30Exemption from information and registration requirements

790J Power to make exemptions

(1) The Secretary of State may exempt a person (whether an individual
or a legal entity) under this section.

(2) The effect of an exemption is—

(a) 35the person is not required to comply with any notice under
section 790D(2) or 790E (but if a notice is received, the person
must bring the existence of the exemption to the attention of
the company that sent it),

(b) companies are not obliged to take steps or give notice under
40those sections to or with respect to that person,

(c) notices under section 790D(5) do not require anyone else to
give any information about that person,

(d) the duties imposed by sections 790G and 790H do not apply
to that person, and

(e) the person does not count for the purposes of section 790M as
a registrable person or, as the case may be, a registrable
relevant legal entity in relation to any company.

(3) The Secretary of State must not grant an exemption under this
5section unless the Secretary of State is satisfied that, having regard to
any undertaking given by the person to be exempted, there are
special reasons why that person should be exempted.

Required particulars

790K Required particulars

(1) 10The “required particulars” of an individual who is a registrable
person are—

(a) name,

(b) a service address,

(c) the country or state (or part of the United Kingdom) in which
15the individual is usually resident,

(d) nationality,

(e) date of birth,

(f) usual residential address,

(g) the date on which the individual became a registrable person
20in relation to the company in question, and

(h) the nature of his or her control over that company (see the
specified conditions in Schedule 1A).

(2) In the case of a person in relation to which this Part has effect by
virtue of section 790C(12) as if the person were an individual, the
25“required particulars” are—

(a) name,

(b) principal office,

(c) the legal form of the person and the law by which it is
governed,

(d) 30the date on which it became a registrable person in relation to
the company in question, and

(e) the nature of its control over the company (see the specified
conditions in Schedule 1A).

(3) The “required particulars” of a registrable relevant legal entity are—

(a) 35corporate or firm name,

(b) registered or principal office,

(c) the legal form of the entity and the law by which it is
governed,

(d) if applicable, the register of companies in which it is entered
40(including details of the state) and its registration number in
that register,

(e) the date on which it became a registrable relevant legal entity
in relation to the company in question, and

(f) the nature of its control over that company (see the specified
45conditions in Schedule 1A).

(4) Section 163(2) (particulars of directors to be registered: individuals)
applies for the purposes of subsection (1).

(5) The Secretary of State may by regulations make further provision
about the particulars required by subsections (1)(h), (2)(e) and (3)(f).

(6) Regulations under subsection (5) are subject to negative resolution
procedure.

790L 5Required particulars: power to amend

(1) The Secretary of State may by regulations amend section 790K so as
to add to or remove from any of the lists of required particulars.

(2) Regulations under this section are subject to affirmative resolution
procedure.

CHAPTER 3 10Register of people with significant control

790M Duty to keep register

(1) A company to which this Part applies must keep a register of people
with significant control over the company.

(2) The required particulars of any individual with significant control
15over the company who is “registrable” in relation to the company
must be entered in the register once all the required particulars of
that individual have been confirmed.

(3) The company must not enter any of the individual’s particulars in
the register until they have all been confirmed.

(4) 20Particulars of any individual with significant control over the
company who is “non-registrable” in relation to the company must
not be entered in the register.

(5) But the required particulars of any entity that is a registrable relevant
legal entity in relation to the company must be noted in the register
25once the company becomes aware of the entity’s status as such.

(6) If the company becomes aware of a relevant change (within the
meaning of section 790E) with respect to a registrable person or
registrable relevant legal entity whose particulars are stated in the
register—

(a) 30details of the change and the date on which it occurred must
be entered in the register, but

(b) in the case of a registrable person, the details and date must
not be entered there until they have all been confirmed.

(7) The Secretary of State may by regulations require additional matters
35to be noted in a company’s PSC register.

(8) Regulations under subsection (7) are subject to affirmative resolution
procedure.

(9) A person’s required particulars, and the details and date of any
relevant change with respect to a person, are considered for the
40purposes of this section to have been “confirmed” if—

(a) the person supplied or confirmed them to the company
(whether voluntarily, pursuant to a duty imposed by this
Part or otherwise), or

(b) another person did so but with that person’s knowledge, or

(c) 5they were included in a statement of initial significant control
delivered to the registrar under section 9 by subscribers
wishing to form the company.

(10) In the case of someone who was a registrable person or a registrable
relevant legal entity in relation to the company on its incorporation—

(a) 10the date to be entered in the register as the date on which the
individual became a registrable person, or the entity became
a registrable relevant legal entity, is to be the date of
incorporation, and

(b) in the case of a registrable person, that particular is deemed
15to have been “confirmed”.

(11) For the purposes of this section—

(a) if a person’s usual residential address is the same as his or her
service address, the entry for him or her in the register may
state that fact instead of repeating the address (but this does
20not apply in a case where the service address is stated to be
“The company’s registered office”);

(b) nothing in section 126 (trusts not to be entered on register)
affects what may be entered in a company’s PSC register or is
receivable by the registrar in relation to people with
25significant control over a company (even if they are members
of the company);

(c) see section 790J (exemptions) for cases where a person does
not count as a registrable person or a registrable relevant
legal entity.

(12) 30If a company makes default in complying with this section, an
offence is committed by—

(a) the company, and

(b) every officer of the company who is in default.

(13) A person guilty of an offence under this section is liable on summary
35conviction to a fine not exceeding level 3 on the standard scale and,
for continued contravention, a daily default fine not exceeding one-
tenth of level 3 on the standard scale.

(14) A company to which this Part applies is not by virtue of anything
done for the purposes of this section affected with notice of, or put
40upon inquiry as to, the rights of any person in relation to any shares
or rights in or with respect to the company.

790N Register to be kept available for inspection

(1) A company’s PSC register must be kept available for inspection—

(a) at its registered office, or

(b) 45at a place specified in regulations under section 1136.

(2) A company must give notice to the registrar of the place where its
PSC register is kept available for inspection and of any change in that
place.

(3) No such notice is required if the register has, at all times since it came
into existence, been kept available for inspection at the company’s
registered office.

(4) If a company makes default for 14 days in complying with subsection
5(2), an offence is committed by—

(a) the company, and

(b) every officer of the company who is in default.

(5) A person guilty of an offence under this section is liable on summary
conviction to a fine not exceeding level 3 on the standard scale and,
10for continued contravention, a daily default fine not exceeding one-
tenth of level 3 on the standard scale.

790O Rights to inspect and require copies

(1) A company’s PSC register must be open to the inspection of any
person without charge.

(2) 15Any person may require a copy of a company’s PSC register, or any
part of it, on payment of such fee as may be prescribed.

(3) A person seeking to exercise either of the rights conferred by this
section must make a request to the company to that effect.

(4) The request must contain the following information—

(a) 20in the case of an individual, his or her name and address,

(b) in the case of an organisation, the name and address of an
individual responsible for making the request on behalf of
the organisation,

(c) the purpose for which the information is to be used, and

(d) 25whether the information will be disclosed to any other
person, and if so—

(i) where that person is an individual, his or her name
and address,

(ii) where that person is an organisation, the name and
30address of an individual responsible for receiving the
information on its behalf, and

(iii) the purpose for which the information is to be used by
that person.

790P PSC register: response to request for inspection or copy

(1) 35Where a company receives a request under section 790O, it must
within 5 working days either—

(a) comply with the request, or

(b) apply to the court.

(2) If it applies to the court, it must notify the person making the request.

(3) 40If on an application under this section the court is satisfied that the
inspection or copy is not sought for a proper purpose—

(a) it must direct the company not to comply with the request,
and

(b) it may further order that the company’s costs (in Scotland,
45expenses) on the application be paid in whole or in part by