As discussed previously, the new obligation for UK companies and limited liability partnerships (LLPs) to keep and maintain a register (Register) of people with significant control (PSC) over the company (PSC Register), as introduced by the Small Business, Enterprise and Employment Act 2015, includes an individual or entity that otherwise exercises (or has the right to exercise) “significant influence or control” over the company.

On December 21, 2015, the Department for Business, Innovation and Skills (BIS) published consultation draft statutory guidance for UK companies and LLPs as to the meaning of “significant influence or control.” Under the draft guidance:

• a person has control of a company or the activities of a trust or firm when they have the power to direct its policies and activities; and

• “significant influence” enables the person to ensure that the company or trust adopts those policies or activities desired by the holder of the significant influence.

Helpfully, the draft guidance also provides a non-exhaustive list of safe harbor roles and relationships that would not normally be considered exercising significant influence or control. These roles include:

• persons who provide advice or direction in a professional capacity (i.e. lawyers, accountants, management consultants or financial advisors);

• persons engaged in third-party commercial or financial agreements (i.e. suppliers, customers or lenders);

• employees acting in the course of their employment; and

• directors of a company (i.e. managing directors, sole directors or non-executive directors who hold casting votes).

However, the draft guidance notes that a person may still be considered a PSC if the role or relationship contains elements that exceed the role or relationship normally understood or exercised, or if the role or relationship forms one of several opportunities in which that person has to exercise significant influence or control.

The BIS intends the guidance in relation to UK companies to apply beginning April 6.It has not specified the effective date of the guidance issued for UK LLPs, although comments from the UK government this past summer suggest that the LLP guidance also will apply on April 6.

The consultation on draft guidance closes on January 11 and finalized guidance is expected soon after.

The UK company guidance is available here.

The UK LLP guidance is available here.