Individuals exercising ‘significant control’ of a company may not be readily identifiable from the records maintained at Companies House given that such control from substantial shareholders who are able to control registered directors and, through them, the activities of the company.

The Companies Act 2006 (‘the Act’) provides the legislation requiring companies to maintain a register of everyone in a position to exercise ‘significant control’.

John Veale of Kangs Solicitors outlines the duties imposed by the Act and the possible criminal consequences for breach.   

 

The team at Kangs Solicitors offers vast experience and is highly regarded nationwide for assisting clients facing allegations of criminal activity of every nature, including those involving Company Act offences, Director Disqualification Proceedings and Insolvency and Bankruptcy.

Our team is led by Hamraj Kang who is recognised as a leading expert in the field. He is one of only two solicitors nationally to be ranked as a ‘star individual’ for six consecutive years in the legal directory Chambers & Partners.

Other members of the team are ranked in the Legal 500 and also ranked in Chambers & Partners.

For an initial no obligation discussion, please call our Team at any of our offices detailed below:

Who is in Significant Control? | Kangs Company Offences Defence Solicitors

The Act provides as follows:

Section 790C describes ‘a person with (or having) “significant control” over a company’ as ‘an individual who meets one or more of the specified conditions in relation to the company’.

The conditions are those specified in Part 1 of Schedule 1A’.

Schedule 1A Part 1 ‘specifies the conditions at least one of which must be met by any individual in relation to a company in order for the individual to be a person with “significant control” over the company’ being a person who:

  • ‘holds directly or indirectly, more than 25% of the shares’ in the company,
  • ‘holds directly or indirectly, more than 25% of voting rights’ in the company,
  • ‘holds the right, directly or indirectly, to appoint or remove the majority of the board of directors’ of the company,
  • has the right to exercise, or actually exercises, significant influence or control’ over the company.

A company must keep a Register of Persons with Significant Control or elect to keep this information with the Registrar.

Register of Persons With Significant Control | Kangs Corporate Regulations Solicitors

With regard to the maintenance of a Register, the Act requires that:

  • companies and their officers seek, by way of Notice where appropriate, and record all requisite information from those believed to exercise significant control.
  • the information recorded in the Register is correct and up to date.
  • all those aware that they have significant control, or ought reasonably to be so aware, must ensure that they notify the company accordingly.

Penalties For Breach | Kangs Company Director Disqualification Proceedings Solicitors 

Failure to strictly maintain the Register, send out enquiry notices, notify the registry when required to do so or to provide false information can result in criminal charges being pursued against a company and its officers who are in default and:

  • conviction before a Crown Court can result in a fine, a prison sentence for a maximum period of two years or both.       
  • conviction before a Magistrates’ Court can result in a fine, a prison sentence for a maximum period of twelve months or both.         

Who Can I Contact for Advice & Help? | Kangs National Criminal Defence Solicitors

If you are, or anticipate being, subject to investigation or prosecution by the Insolvency Service, Company Investigations, the police or any other prosecuting authority in relation to any alleged criminal offence, including any under the Companies Act, you should seek professional advice immediately.

The Team at Kangs Solicitors assists clients facing such difficulties on a daily basis and we are here to assist you.

Please do not hesitate to contact any of the following who will be pleased to speak to you:

Hamraj Kang
hkang@kangssolicitors.co.uk
07976 258171 | 020 7936 6396 | 0121 449 9888

John Veale
jveale@kangssolicitors.co.uk
0161 817 5020 | 020 7936 6396  | 07989 521 210

Tim Thompson
tthompson@kangssolicitors.co.uk
020 7936 6396 | 0121 449 9888