Dive into the world of PAYE investigations. Uncover the facts, implications, and insights in this informative blog
For LLPs and limited companies, one of the reporting requirements that is mandatory is the registering of PSCs (People with Significant Control) and the confirmation statement. Anyone who is either a designated LLP member or company director must take personal responsibility as one of the company’s officers, for keeping the statutory registers, including the PSC register, and for sending the confirmation statement at least once annually to Companies House.
What Is A Confirmation Statement?
Form CS01 from Companies House is the confirmation statement, and this reporting requirement has been relatively recently introduced. Designed to replace form AR01, the annual return, the CS01 services an identical purpose – to provide the latest vital information about the business to Companies House.
The information that is provided on this statement is then placed on the companies’ central register where the public can access it if they wish to do so. Anybody is permitted to view the information whenever they want, ensuring the public as well as government agencies and other business can openly access key data regarding any company that they interact with in any respect.
Annual Return v Confirmation Statement
On 30th June 2016, the annual return was replaced by the confirmation statement, making the final date for any pre-existing company to file their annual return the 29th June 2016. In terms of the forms, there are very few differences between them. In fact, identical information is required to complete the confirmation statement as the annual return, the cost of filing is also identical, and the regularity of both forms’ deliveries also remains the same at a minimum of once annually.
Nevertheless, there is a major difference which is that the confirmation statement is simpler than an annual return form, with no requirement to enter identical information year after year so long as the details of the company remain the same.
All that is required to complete the confirmation statement form is to check the details that Companies House holds are correct, confirm them, and then submit the confirmation form. It is only if there have been any changes that companies are required to enter those changes into the system.
What Information Must Be Checked When Completing A Confirmation Statement?
It is imperative to check the information that is held about your organisation by Companies House is correct. This must be done each year.
The information that you must check for accuracy when completing your company’s Confirmation Statement includes:
- The details regarding your company directors, secretary, registered office, and the address at which your company records are kept.
- Your shareholder information (if your organisation has shares) and statement of capital.
- Your company’s SIC code.
- Your PSC (persons of significant control) register.
What Information Must Be Included In The Confirmation Statement?
If you are electronically completing your company’s confirmation statement, all you need to do is check the registered details that are already held on the system and to either confirm they are correct, or make updates as necessary to the information which is not accurate before you file the statement with Companies House.
The information that must be included and confirmed in the confirmation statement is as follows:
- The confirmation date – this is the date of completing the statement on which it was confirmed that all of the information held was correct.
- The company’s officers including the company secretary and director(s) if you have appointed one.
- Company members including LLP members, guarantors, and shareholders.
- The company’s registration number and name.
- The company shares’ trading status i.e. whether the shares have been admitted to trading markets.
- The registered company office address.
- The address where the company’s statutory records are kept e.g. the SAIL address, Companies House, or the registered office address.
- Information regarding what the business does (for this element, the SIC or Standard Industrial Classification code is needed).
- The statement of capital, outlining details about the shares issued by the company to its shareholders including the share classes, share numbers, share class rights, and the value of your shares that are in issue as well as the unpaid amount on those shares.
- The shareholders’ names, how many of them there are, and the kinds of shares that they own.
- PSCs (people with significant control).
The form is relatively simple to complete, taking a fairly short length of time as long as all of the key details are already to hand. Smaller companies that have only a couple of shareholders and directors should find the form can be completed in just a few minutes.
Remember that when you file your company’s confirmation statement, the purpose of doing so is the confirm that your public profile has been checked and confirmed to be up to date for all records, registered office, LLP members, and officers etc.
The Statement Of Capital
When completing the Confirmation Statement, a statement of capital must be completed when the company is limited by shares. LLPs (limited liability partnerships) and companies that are limited by guarantee are not required to complete this information since they have no shares.
When a company is required to complete the statement of capital, they must supply the following information:
- The total amount of shares that the company has issued.
- The nominal aggregate value of the shares.
- The currency that the shares are held in.
- If any, the aggregate amount that remains unpaid on the shares.
For every type or class of shares, it is also required that you provide:
- The total amount of shares in that class.
- The nominal aggregate value of all of that class of shares.
- The prescribed rights’ particulars attached to those shares.
Prescribed particulars set out the rights held by the shareholders. The majority of companies will have Ordinary shares, providing the below rights to those who own them:
- Rights to cast a single vote for each share held at the general meeting.
- Rights to share the profits in the form of dividend payments relating to their ownership percentage as represented by their shares.
- Whether their share is liable for redeeming or to be redeemed at the shareholder or company’s option.
- Rights to receive their share of the capital when the company is wound up.
When a company issues Ordinary shares, adopting the Model Articles of Association, these above-listed rights are applicable and are outlined within the articles.
If you lack certainty about which prescribed particulars and voting rights are applicable to your organised, referring to the articles is essential. Otherwise, the information could be contained with a company resolution.
How Do I Report Changes To My Confirmation Statement?
If changes occur, you must report them to Companies House. Changes in your shareholder information, SIC code, or statement of capital can be reported when making your annual confirmation statement. There are, however, certain changes that cannot be reported in this way. Some changes that cannot be reported via your company’s confirmation statement include:
- Changes to the officers of your company
- Changes to your company’s registered office address
- Changes to the address at which your company records are kept
- Changes to your PSCs (persons of significant control)
Any changes of those natures must be separately filed with Companies House.
When Should The Confirmation Statement Be Submitted?
Confirmation statements must be submitted to Companies House as least once annually, typically on or before the same date every year. The period of 12 months within which the confirmation statement must be filed is known as the review period or confirmation period.
The initial confirmation statement will become due 12 months following the initial registration of the company with Companies House, otherwise known as the incorporation date or the date on which you established your company. This date is outlined on the company’s incorporation certificate. So, as an example, if your company was initially incorporated on April 10th 2022, your initial confirmation statement will become due on April 10th 2023.
Your filing deadline and due date will be the same each year, unless the confirmation statement is filed early. The due date will be called either the made-up date or the confirmation statement date, and it represents the date when you are making your confirmation that every registered detail about your company is accurate and reflects your company’s details as of that specific date.
Following the date of confirmation, you have a maximum of 14 days within which to send Companies House your statement, so in the above example, you must submit it by April 24th 2023. It does not matter if changes occur in the information between the date of confirmation and the date on which the statement is sent to Companies House as the details can be updated at any time afterwards. Alternatively, it is permitted to wait until the next statement becomes due next year.
The confirmation statement can be sent to Companies House early, however there is no requirement for this unless you wish to let Companies House know about a change in your company details before the statement becomes due. It is important to remember, however, that if the statement is filed early, the next one’s due date changes accordingly, and the same penalties will apply if you accidentally overlook the change in date and file late.
How Do I Send Companies House My Confirmation Statement?
You have two options when it comes to submitting confirmation statements to Companies House. The first option is to fill in the confirmation statement on a paper form and mail the form to Companies House. The cost for this option is £40.
If you opt to file your company’s confirmation statement by using the postal method, you must manually enter the necessary information and confirm it using form CS01 from Companies House. You are only required to complete parts 1 to 4 of this form if any changes have been made during the past year to shareholders, SIC codes, your shares’ paid-up status, issued shares, and shares’ trading status as well as if you are making an application to be exempt from maintaining and keeping a PSC (persons with significant control) register.
When making a paper filing, you must also supply the full name of your company as well as its registration number. You must also provide the statement’s “made-up date” which is sometimes called the “confirmation date”. This date is when you make your confirmation that all of the information that is registered about your company is accurate.
Should any other details about your company need to be changed that cannot be updated using your confirmation statement and you would prefer to make those changes with paper forms instead of using the online system, you must submit the applicable forms from Companies House, wait for approval to be given for those changes, and then mail your confirmation statement forms in the post.
Alternatively, it is possible to complete the confirmation statement electronically, submitting it online. This option is simpler and also cheaper at just £13.
Although you have an option to submit the confirmation statement for your company by post, it is often a better choice to take the electronic option when completing your statement. This is because it will take far longer to submit your document in the post, and it is also a more costly option.
Furthermore, paper filings are also more likely to be rejected because of missing information or errors, resulting in you having to resubmit the paperwork at a later date. You can save yourself time, money, and effort by using the online system.
How Do I Change And Update Information On My Confirmation Statement?
One of the best things about confirmation statements is that they can be updated at any time during the year without any additional charges. This holds true even if you update your statement multiple times. This is something that was impossible with annual returns. If any details required updating or changing, a full annual return had to be completed and the filing fee paid again.
If you make an error in your confirmation statement completion, or if you have frequently changing company details, the confirmation statement is a far better option since you are not required to pay multiple fees.
Since the entire purpose of completing your confirmation statement and filing it with Companies House is to ensure that all of the company details are up to date and that the corporate data on the public register of companies is entirely accurate, you must ensure that you send your confirmation statement to companies house once per year at a minimum, even when no changes have been made since the previous statement date, or the date of incorporation to your company.
Failure to submit your company’s confirmation statement could result in a significant fine and the striking off of your company. Therefore, it makes sense to ensure that you meet this legal requirement every year.
Which Kinds Of Businesses Have To Send Confirmation Statements?
If your business is registered at Companies House, you must complete your confirmation statement. PLCs (public limited companies), unlimited companies, LLPs (limited liability partnerships), and private companies are all included in this. Dormant LLPs and companies must complete an annual confirmation statement too, even though they are not trading.
If you are a sole trader you are not required to complete a confirmation statement as you are not Companies House registered. Only HMRC registration and reporting is required for sole traders.
What Are The Consequences If I File My Company’s Confirmation Statement Late?
Designated LLP members and company directors have responsibility of ensuring that the company’s confirmation statement has been accurately completed and filed in a timely manner with Companies House each year. Even when you plan to close the company and make an application for it to be struck off Companies House’s register, it is still a legal requirement to meet all of the filing obligations which occur before that date when the company will become dissolved.
Although no penalties are imposed by Companies House for filing a confirmation statement late, you should note that it is deemed to be a criminal offence to fail to make your filing on time. Also, as history about corporate filings are on public record, if you file late, this could have detrimental impacts on the credit rating of your company and could cause significant damage to the professional reputation of your organisation.
Another important thing to be aware of is that designated LLP members and directors also run the risk of being fined personal in the criminal court, with Companies House potentially seeking to strike off the LLP or company should statutory filings contain to remain outstanding.
What Is The Register Of PSCs (People With Significant Control)?
Since April 6th 2016, virtually every company in the UK has been required to maintain a PSC register or register or Persons with Significant Control. These obligations were first introduced under the 2015 Small Business Enterprise and Employment Act, and it was the intention of the government to make corporate transparency more widespread since complex ownership structures often make it hard to determine who controls and owns companies.
While the changes were introduced to enhance transparency with regard to large organisations, even smaller limited companies that have simple structures must also maintain their own PSC register. From June 30th 2016, all applicable companies were required to file their information at Companies House under the new regulations regarding Confirmation Statements (which were brought into from that date to replace the Annual Return).
It is important for anyone who owns a business, however small, to understand what the term PSC (Person with Significant Control) means, how to identify who is a PSC in your company, how to create and maintain your PSC register, and also what you must do to avoid falling foul of your legal responsibilities and obligations.
The PSC Register or Register of People With Significant Control was first introduced on 6th April 2016. At that time, a requirement to provide Companies House with PSC information and to keep the register came into effect.
The information recorded in the PSC register is about any business or person who either indirectly or directly owns over 25% of either the company itself or the company’s voting rights, or who has power otherwise to exert a particular level of control or influence over how a business operates.
When a company becomes incorporated, information regarding the company’s PSC must be supplied. If the PSC of a company changes, the register must be updated within a maximum of 14 days, with another 14 days after that to supply the newly updated information to Companies House using PSC01-09 forms.
How Is A PSC Register Created For A Company?
The law regarding PSC registers requires every applicable company to take sufficient “reasonable steps” in order to determine if the company has any PSCs, and if it is deemed to have any, to identify all of them. If your company is small, you should not find it too difficult to identify your PSCs. Usually, your PSCs will be any of your company’s shareholders who own over 25% of your company’s shares. There are unlikely to be any other individuals who fall under the criteria to be regarded as a PSC.
If your company has only two shareholders, for example, each one owning half of the company’s shares, and in cases where your company has chosen to adopt the Model Articles of Association, usually it will only be the two shareholders who will be regarded as PSCs – no other individuals will meet the criteria to be registered.
It is important to remember that the usual considerations of someone who owns over 50% (i.e. 51% or over) of the company’s shares as being “the individual with control”, with anyone who owns 50% or under of the shares having no control, are not applicable when it comes to PSC regulations. Only 25% of your company’s shares need to be held by an individual for them to count as being a PSC.
What Information Must Be Included In The PSC Register?
Before you enter any information onto your PSC register, you must confirm all of the key details with the identified PSCs. These details include:
- Their name
- Their date of birth
- Their nationality
- The country, area of the UK or state in which they typically live
- Their service address
- The date on which they became a company PSC (this will be either on or after April 30th 2016)
- Which PSC conditions are met
The PSCs level of voting rights and shares must be included within these categories:
- 75% or over
- Over 50% but under 75%
- Over 25% and up to 50%
What Kinds Of Business Have To Maintain A PSC Register?
Several types of businesses are required to maintain and keep a PSC register and to report to Companies House the details of their PSCs. These include:
- UK private limited companies, unlimited companies, and public limited companies.
- UK LLPs (limited liability partnerships)
- SEs (Societates Europaeae) registered with Companies House
Even if you have a dormant company, you are still required to maintain a PSC register and to report the details of your PSCs to Companies House.
How do I Identify Persons With Significant Control?
In the case of small companies, it is fairly simple to identify people with significant control, especially if there is only one shareholder and director in the company.
PSCs can be identified as somebody who:
- Holds more, either indirectly or directly, than 25% of the company’s voting rights.
- Owns more, either indirectly or directly, than 25% of the company’s issued shares.
- Has rights to remove or appoint most of the directors of the company.
- Exercises or has rights to exercise significant control or influence over the company and its activities.
- Alternatively, where a firm or trust would meet one of these above conditions if it had been an individual.
Things become a little more complex if shares in the company are held by one individual on another person’s behalf. In such a case, the individual holding the shares and who is registered as a shareholder, cannot be one of the PSCs. The individual on whose behalf the shares are being held may also be a PSC with control over the organisation. In such circumstances, PSCs are not always easy to identify.
A PSC may control or influence the company directly or, potentially, on the behalf of another person. For example, they may control or influence the shareholders’ or directors’ actions. It is only in very limited circumstances that this condition applies, and reference to PSC guidance may be necessary to determine whether it is applicable to your company.
When a firm or trust without a “legal personality” controls your company, you must also check the PSC guidance to find out whether this condition is applicable. If the firm or trust meets this condition, all members, partners, or trustees of the company must be recorded as company PSCs, with the information then being registered with Companies House.
Companies can either have a single PSC or may have several. All of their details must be recorded on the PSC register, with this information also being included at the time of setting up or incorporating the company.
When a PSC cannot be identified, or if the company does not have a PSC, Companies House must be informed.
How Can I Get Confirmation Of My Company’s PSCs’ Details?
In some cases, you will probably have the necessary details about your company’s PSCs readily available to you. But, to make sure that you are fully in compliance with the law, you should nevertheless request confirmation from every PSC, or every individual that you believe may be one of your company’s PSCs of their details.
In order to achieve this, your company must send out a 790D form, which is a formal company notice to the individual in question which asks them for confirmation about whether or not they are one of your company’s registrable persons, and if so, the nature of the control that they have over your company. If the person in question fails to reply, this is regarded as an offence.
Once your receive confirmation of the information that you hold from the individual themselves, you can then enter it into the register.
In cases where you cannot identify that somebody you believe to be one of your company’s PSCs is, in fact, one, you are then permitted to take further action. You can then choose to serve a 790D request to anybody who you think will be aware of the PSC’s identity. This could include individuals such as accountants, family members, and solicitors. It is important to update the PSC register, confirming that 790D requests have been sent out, even while you are waiting for that individual to make their response.
What Will Happen If My Company Has No PSCs?
There are several circumstances in which a company will have no PSCs. As an example, if your company has five shareholders, each of whom owns 20% (a fifth) of the company’s voting rights and shares, it will probably have no PSCs. Nevertheless, you should ensure that you have fully checked all of the criteria to make sure that no one has been overlooked.
In such cases, you must add a general statement to the PSC register in which you declare that your company has no PSCs. It is not possible to leave the PSC register blank. Therefore, if you have not finished reviewing the identities of your company’s PSCs, you must still add a statement to outline your current situation.
What Do I Do If My Company Has No Shares?
Any company that is a LLP (limited liability partnership) or that is limited by guarantee will have no shareholders or shares. In such cases, you must still create and maintain the PSC register for your company, but the criteria regarding shares will not be applicable in the same way.
What Happens If The Information About PSCs Changes?
Any changes to a company’s PSC details must be recorded in the PSC register. This includes changes in the individual’s personal information or the nature of their control. This must be completed within a maximum of 14 days after the change occurs and the changes must be sent to Companies House by the time another 14 days has elapsed. The easiest way to complete the information is online, although third-party software can also be used to send PSC information.
As soon as you are made aware about any changes that may have or that definitely have affected the identity of the company’s PSCs, you must update the register as soon as possible. As an example, should a shares transfer make it possible that a new person of significant control has been created, and that somebody who was a PSC before may now not be one any more, this must be reflected in an update to the register.
In a similar way, if new shares are allotted, new PSCs may be introduced, but at the same time, some of the existing PSCs may no longer meet the relevant criteria. In such cases, this information must also be reflected in the PSC register as quickly as possible after the change has occurred.
If you think that one of your new shareholders could potentially now be a person of significant control, your company must make contact with the individual in question to determine whether or not they meet the relevant criteria, and, if they do, the necessary information must then be gathered from them so that they can then be entered onto the PSC register.
Do I Need To Contact My Company’s PSCs?
It is essential to attempt to identify anybody who may be one of your company’s PSCs and to make contact with them. The reason for this is the refusal to supply information about your company’s PSCs is deemed to be a criminal offence, with restrictions able to be applied to their voting rights or shares. It is a major step to apply restrictions, and this measure should only be considered if the individual has failed repeatedly to reply to your request for their information.
The PSC register has to contain details about every PSC that your company has. If it is not possible to provide this information, a statement must be put in the register explaining why the information cannot be supplied. The PSC register is not permitted to be blank.
What Happens If A PSC Applies For Protection?
There are some cases where an individual may apply to have protection from their information being published on Companies House’s register. When one of your PSCs makes such an application for protection, it must be recorded on the PSC register. Protection from such disclosure becomes applicable from the date on which the PSC makes the application to Companies House.
What Happens If I Choose To Keep The Information About My PSCs At Companies House?
Virtually all of the details about your company’s PSCs will be publicly available, including your PSCs full dates of birth. Their home addresses, however, will not be made publicly available unless their home address is also their named service address. All PSCs must be given at least 14 days’ of notice and if no objections are raised, Companies House can then hold the register.
Inspection Of The Register
Every company in the UK that is required to create and maintain their own PSC register is required to submit the relevant details to Companies House once each year as a minimum. The information about PSCs will also be included with your company’s confirmation statement, that has replaced the annual return.
Your company’s PSC register has to be made available for public inspection at the register office of your company or, alternatively, at a SAIL (single alternative inspection location). Anybody is permitted to examine your register without charge and you are required to supply copies if requested, although a maximum charge of £12 can be levied for every copy you provide. You may not disclose your PSCs’ home addresses.
You must remember that your company’s PSC register is only one of several statutory registers that your company must maintain by law. You must make sure that you keep it updated at all times since anybody who has a “proper purpose” is permitted to make a request for its inspection at any time and you are legally required to comply with such a request.
Failure To Meet PSC Register Requirements
If you believe your company has one or more PSCs but you lack all their relevant details, you must send a notice to them. It is also wise to notify your PSCs’ advisors, including their business partners, accountants, and lawyers. Anybody who fails to respond to such a notice within a single calendar month period, or who supplies false details, will be deemed to be committing a criminal offence which could result in a fine, two-year jail sentence, or both.
Other Types Of Company
Although Scottish partnerships that are eligible are not required to keep a register, they are required to send information about their PSCs to Companies House. SQPs (Scottish qualifying partnerships) and SLPs (Scottish Limited Partnerships) are unable to either keep their register at an alternative address or at Companies House.
Who Has Responsibility For The PSC Register And Confirmation Statement?
As an LLPs designated member or company director, you have responsibility for ensuring the confirmation statement has been delivered to Companies House every year, and also that the company’s PSC register is being properly maintained.
In some cases, an accounted or appointed company secretary will have responsibility for the confirmation statement and PSC register delegated to them. But if the nominated person fails to maintain these requirements, the designated LLP members or directors remain liable.
Should you find yourself struggling to manage your company’s reporting and filing obligations, or you are seeking ways of making your life easier through reduced administrative duties, it is often a good idea to use the services of an accountant to help you with those responsibilities.