People with Significant Control (PSCs)
In many countries, the government wants to make sure companies are honest about who owns and controls them. This is very important for stopping bad actions like money laundering and tax fraud. One of the ways the government checks this is by looking at who has “significant control” over a company. These people are called “People with Significant Control” (PSCs).
This article explains what PSCs are, why they matter, and what companies in Nigeria need to do about them.
What Are People with Significant Control (PSCs)?
People with Significant Control (PSCs) are people or groups that have a lot of control over a company. These people might own a lot of shares, have voting power, or can make big decisions for the company. A PSC can be a person or a group of people.
Governments ask companies to find out who their PSCs are. This helps make sure that the company is working openly. It also helps prevent crimes like money laundering and tax evasion.
A PSC might meet one or more of these rules:
- Own Shares: Own more than 25% of the shares of the company.
- Voting Rights: Have more than 25% of the voting rights.
- Control the Board: Be able to pick or remove most of the board members.
- Influence Decisions: Be able to make big decisions for the company, even if they don’t own many shares.
- Trusts and Partnerships: Sometimes, a trust or partnership can be a PSC. If that happens, the people who control that trust or partnership might also be PSCs.
Why Is It Important to Find PSCs?
Finding out who the PSCs are in a company is important for many reasons:
- Transparency: It helps everyone understand who is in control of the company.
- Fighting Financial Crimes: It helps stop things like money laundering and tax evasion.
- Good Company Management: Knowing who controls a company helps the company be more open and honest. This is good for the company’s reputation.
Rules for PSCs in Nigeria
In Nigeria, the government has rules to help find and track PSCs. These rules are in a law called the Companies and Allied Matters Act (CAMA). This law was updated in 2020.
Here are the main rules:
- PSC Register: Every company must have a list of its PSCs. This list must include important information about each PSC.
- Company’s Duty: Companies must try to find out who their PSCs are and keep their list up to date.
- Reporting: Companies must tell the government who their PSCs are. This information must be given to the Corporate Affairs Commission (CAC) in Nigeria. Companies must keep this information current.
- Punishments for Breaking the Rules: If a company does not follow the PSC rules, it can get in trouble. This might include fines or even jail time for people in charge of the company.
How Do Companies Find PSCs?
To find the PSCs, companies need to do a few things:
- Look at Shares: Check the company’s share list. Find out who owns more than 25% of the shares or who has voting power.
- Look at Company Rules: Look at the company’s rules to see who can pick or remove board members.
- Think About Other Ways of Control: Some people might control the company even if they don’t own many shares. Companies should check if someone has control through other companies or trusts.
- Talk to Others: Companies can talk to shareholders to learn more about who has control of the company.
Keeping the PSC Register Updated
The PSC list (register) must have the following details about each PSC:
- Name: Full name of the PSC.
- Date of Birth: The PSC’s birth date.
- Nationality: The country the PSC is from.
- Service Address: The PSC’s contact address (for official letters).
- Home Address: This is not shared with the public.
- Start Date: The date the PSC became involved with the company.
- Type of Control: This tells how the PSC controls the company (like by shares or votes).
Whenever something changes about a PSC, the company must update the register. They also need to tell the CAC about any changes within 14 days.
Conclusion
Finding and keeping track of People with Significant Control (PSCs) is very important. It helps companies be open and honest about who owns and controls them. This also helps fight crime and ensures good company management.
In Nigeria, the law (CAMA 2020) tells companies how to find PSCs and what to do with this information. Companies must keep their PSC list up to date and tell the government about any changes. This helps make businesses more trusted and honest. By following these rules, companies will help keep the business world clean and trustworthy.