Chapter 2: Information-gathering
Duty on companies
790D: Company’s duty to investigate and obtain information
402.Section 790D sets out a company’s duty to investigate and obtain information on registrable persons and RLEs.
403.A company must take reasonable steps to find out if there is anyone who is a registrable person or RLE in relation to it and identify them (subsection (1)), and must give notice to anyone whom it knows or has reasonable cause to believe to be a registrable person or RLE (subsection (2)). The duty in subsection (2) does not limit the company’s obligations under subsection (1).
404.In addition, a company may give notice to a person it knows or has reasonable cause to believe knows the identity of a registrable person, an RLE (whether registrable or non-registrable) or an entity that would be an RLE were it subject to its own disclosure requirements. A company may also give notice to a person likely to know someone who would know the identity of such persons. This is set out in subsections (5) and (6). A company may give notice to a person under subsections (2) and (5) simultaneously.
405.Subsection (5) is intended to provide the company with a means to obtain information on registrable persons and RLEs where it does not itself know their identity, including where there are entities in the ownership chain which are not RLEs but which might know the identity of a registrable person or RLE. For example, a company may know that a person (X) is acting on behalf of a PSC (P), but may not know any of P’s details. The company may serve notice on X in order to obtain information on P. ‘Knowing the identity of a person’ is defined in subsection (13).
406.A company may serve notice on a lawyer under subsection (5) to obtain information. It will be rare for information held by a lawyer about PSCs or RLEs to be subject to legal professional privilege. However, where that is the case the lawyer is not required to provide information to the company (subsection (12)).
407.Subsections (3) to (4) and (7) to (8) make provision in relation to the giving of notice. They stipulate the information that the notice must contain and must require from the recipient. For example, an individual receiving a notice under subsection (3) must state whether or not they are a registrable person and correct, complete or confirm the particulars included in the notice. “Particulars” is defined in subsection (13)(b). Further provision about the giving of notices may be made by regulations (subsection (9)).
408.As the company’s duty to obtain information under section 790D is on-going and continuous there is no defined period within which steps must be taken or notice given. Addressees must however respond to a notice within one month of the date of the notice (subsection (8)).
409.A company need not give notice if it already knows that a person is a registrable person or RLE and has all of the required information (subsection (11)). In respect of registrable persons, the information must have been provided by the individual or with their knowledge. If this is not the case, the company must give notice to that individual. This is to ensure that individuals are in all cases aware of their entry in the company’s PSC register. This is important, for example, in the event that the individual wants to apply for their information to be protected from disclosure (see Chapter 5) and to ensure that the individual knows to update the company should their personal details change.
790E: Company’s duty to keep information up-to-date
410.Section 790E requires a company to keep information in its PSC register up-to-date.
411.Subsections (2) and (5) require the company to give notice to registrable persons and RLEs as soon as reasonably practicable once the company knows or has reasonable cause to believe that a “relevant change” has occurred, a relevant change being ceasing to be a registrable person or RLE or a change in particulars (subsections (3) and (4)).
412.The notice must require the addressee to confirm whether the change has occurred and, if so, to state the date of the change and to correct, complete or confirm the particulars included in the notice (subsection (6)). As under section 790D, addressees must respond within one month from the date of the notice and further provision may be made by regulations in relation to the giving of such notices (subsection (7)).
413.A company need not give notice if it has already been informed of the relevant change. As under section 790D, information on registrable persons must have been provided by the individual or with their knowledge (otherwise the company must give notice to that individual).
790F: Failure by company to comply with information duties
414.It is an offence, triable either way, for a company to fail to take steps or give notice under sections 790D and 790E. The offence is committed by the company and every officer of the company in default (see section 1121 CA 2006), punishable by imprisonment or a fine.
Duty on others
790G: Duty to supply information
415.Section 790G complements section 790D (which places an obligation on companies to identify registrable persons and RLEs) by placing a proactive disclosure obligation on registrable persons and RLEs in certain circumstances. The intention is to ensure that registrable persons and RLEs who are not known to or identified by the company under section 790D are nevertheless entered in the company’s PSC register.
416.The requirements are loosely based on sections 198 to 211 of the Companies Act 1985, which were replaced by regulations under the Financial Services and Markets Act 2000. Those regulations implement the Transparency Directive and place a disclosure obligation on investors in certain publicly listed companies (see the DTR rules and the exemption in section 790B for DTR5 issuers as a result).
417.The obligation to notify the company arises where a person knows or ought reasonably to know that they are a registrable person or RLE and where their particulars are not already registered in the company’s PSC register, provided they have not received a notice from the company and that these circumstances have continued for a period of at least one month (subsection (1)). This means that a person’s obligation will normally only arise where a company has failed to identify them under section 790D. However, nothing in section 790G prevents a person from notifying the company that they are a PSC or RLE before a month has elapsed, should they wish to do so.
418.Where the duty under section 790G applies, registrable persons and RLEs must notify the company that they are a registrable person or RLE, stating the date on which they became such a person and giving the company their required particulars (see section 790K) (subsection (2)). They must notify the company no later than one month after all the conditions in subsection (1) were first met (subsection (3)).
790H: Duty to update information
419.Section 790H complements section 790E, requiring a registrable person or RLE to notify the company of relevant changes to information in the PSC register. The intention is to ensure that changes to information in the PSC register that are not known to or identified by the company are nevertheless recorded, thereby supporting the accuracy of the company’s PSC register.
420.The obligation arises where the person is entered in the company’s PSC register and knows or ought reasonably to know that a relevant change has occurred, a relevant change being defined in section 790E(3); and where the company’s PSC register has not been altered to reflect the change and the person has not received notice from the company under section 790E within one month of the day on which the change occurred (subsection (1)). As under section 790G, this means that a person’s obligation will normally only arise where the company is not already aware of the change. The person may however inform the company in advance should they wish to do so.
421.The notification must state the date on which the change occurred and provide any information needed by the company to update the register (subsection (2)). The notification must be given by the later of two months after the change occurred (providing one month for the company to send a notice and then one month for the person to make a notification if required) or one month after the person discovered the change. The latter may arise if the person only became aware of the change some time after it had occurred.
Compliance
790I: Enforcement of disclosure requirements
422.Section 790I provides that offences for failure to comply with a notice under section 790D or 790E or a duty under section 790G or 790H are contained in Schedule 1B.
Exemption from information and registration requirements
790J: Power to make exemptions
423.The Secretary of State may exempt an individual or legal entity from the requirements of Part 21A where there are special reasons to do so. This provision broadly reflects section 796 of the CA 2006 (‘Notice requiring information: persons exempted from obligation to comply’).
424.The effect of the exemption is set out in subsection (2) and provides that no information on such persons need be held by the company or provided to the registrar.
Required particulars
Section 790K: Required particulars
425.Section 790K details the information that must be held by the company in respect of registrable persons (both individuals and entities treated as individuals under section 790C(12)) and RLEs. These are the “required particulars”.
426.Subsection (1) provides that in respect of individuals, with the exception of former name and business occupation (which are not thought relevant in the context of people with significant control), the personal information replicates that currently held on company directors (see section 163 of CA 2006, ‘Particulars of directors to be registered: individuals’):
name
a service address
country or state of usual residence
nationality
date of birth
usual residential address.
427.This information should provide for the unique identification of individuals registered in the vast majority of cases.
428.Subsection (2) provides that in respect of entities to be treated as individuals for the purposes of Part 21A, the following information should be held:
name
principal office
legal form and law by which it is governed.
429.Subsection (3) provides that in respect of registrable RLEs, the information about the entity replicates that currently held on corporate directors (see section 164 of CA 2006, ‘Particulars of directors to be registered: corporate directors and firms’):
corporate or firm name
registered or principal office
legal form of the entity and law by which it is governed
register of companies in which it is entered and registration number (if applicable).
430.Information in subsection (2) and (3) should enable the entity in question to be appropriately identified by users of the register.
431.The PSC register must also hold details of the date on which a person became a registrable person or RLE and the nature of that control (subsections (1)(g), (1)(h), (2)(d), (2)(e), (3)(e) and (3)(f), and see Schedule 1A). This will allow those searching the register to see how a person controls the company and the period over which this control has been exercised.
432.In the case of individuals, the PSC register must also state whether restrictions on using or disclosing the individual’s information are in force, following the making of an application under regulations made under section 790ZG (subsection (1)(i)). This will enable the register available for public inspection to indicate that information has been withheld from public disclosure.
433.The Secretary of State may make further provision by regulations about the way in which details of a registrable person or RLE’s control are to be recorded (subsection (5)). The intention is to ensure that given details of control are relevant, appropriate and proportionate.
Section 790L: Required particulars: power to amend
434.Section 790L enables the Secretary of State to make regulations under the affirmative resolution procedure to add or remove data fields from the required particulars in section 790K (and see equivalent power that exists in respect of company directors’ particulars under section 166 of CA 2006, ‘Particulars of directors to be registered: power to make regulations’). This power will help ensure that the policy can be kept under review and adapted in the light of changing circumstances.