Failure to declare interests
It has been recently reported that Jeremy Hunt, The Secretary of State for Health and Social Care, has found himself in the firing line for having failed to notify Companies House of his interest in Mare Pond Properties Limited, a company that was used to acquire seven apartments in Southampton earlier this year.
Although Mr Hunt has since apologised for not having filed a notice informing Companies House of his interest as a person with significant control (PSC) stating that it was, “an honest administrative mistake”, he is far from alone in not having complied with the rules regarding PSCs.
Even though all UK unquoted companies and LLPs should have been maintaining a PSC register with effect from 6 April 2016 and companies admitted to trading on AIM or the NEX Exchange Growth Market should have been maintaining a register since 24 July 2017, the Financial Times has recently reported research which indicates that more than one in ten of the 4.1 million corporations registered with Companies House have still not yet named their PSCs.
There appear to be many reasons for ongoing non-compliance with the PSC regime, but one of the main factors would appear to be that there continues to be a significant degree of ignorance about the PSC regime in which companies and LLPs simply do not fully understand the extent of their obligations despite the availability of fairly comprehensive government guidance notes on the subject.
While failure to comply with the PSC regime is already a criminal offence potentially punishable by a fine and/or up to two years’ imprisonment, it would appear that Companies House is looking to take further action to tackle non-compliance.
According to its recently published 2018 to 2019 business plan Companies House has stated its intent to (among other things):
- actively pursue companies that have not submitted any information as regards their PSCs;
- contact companies where it believes that they have not fully understood their obligations and have therefore provided incorrect or incomplete information; and
- work on data and intelligence sharing gateways with law enforcement and other government departments as part of a wider drive to encourage corporate transparency and tackle money laundering activities.
With more robust measures planned to ensure compliance with the PSC regime, it is imperative that companies and LLPs which are subject to the regime look to get their house in order so as to avoid the serious implications of falling foul of the same.