Persons with Significant Control (PSC)

The Nigerian “Persons with Significant Control Regulations 2022”, defined a Person with significant control (also referred to as a beneficial owner) as a natural person that owns or controls a legal entity. The significant control exercised by the person can either be direct or indirect. A person with significant control could also be a person who holds at least 5% of the issues shares or exercises at least 5% of the voting rights whether directly or indirectly. Section 868 of the Companies and Allied Matters Act 2020 also has a similar definition.

The PSC Regulations was enacted to make further provisions in addition to CAMA to regulate PSCs. Also, Nigeria unveiled its Open Central Register of Beneficial Ownership, also known as the Persons with Significant Control (PSC) Register, on Thursday, May 25, 2023. This aligns with the country’s commitment made during the Anti-Corruption Summit in London on May 12, 2016.

What do you need to know about the PSC Register?

• The PSC register is a public document and thus accessible to members of the public.
• It shows the true ownership and control of companies and LLPs and makes it easier to ascertain who is at the helm of affairs of a corporation. It aids accountability and transparency. It also helps to combat corruption and illicit cash flows of companies.
• No personally identifiable information (PII) is on the register to protect the personal information such as date or birth, phone number and residential address of PSCs.

What is the essence of the Persons with Significant Control Regulations (PSC) 2022?

The PSC regulations was enacted in 2022 with an objective to provide an effective framework and procedure for obtaining relevant information on persons with significant control/beneficial owners of a company, limited liability partnership and any other relevant entity. The Regulations applies to all companies incorporated under Part B of CAMA 2020, limited partnerships under Part C, foreign exempted companies, Incorporated Trustees, registered cooperative societies and every other entity provided for by the Regulations.

When is the right time to file the notice of PSC?

• When a new company/limited liability partnership is formed
• While filing annual returns
• After a person becomes PSC, he must notify the company within seven (7) days and the company must notify CAC within one (1) month
• Filing of annual report by foreign exempted company/limited liability partnership
• When notification is made by a foreign exempted company/limited liability partnership8

Who files notice of PSC? Is it the individual or the company/LLP?

The PSC submits particulars of the control (or any change in particulars of the control) to the Company or LLP in writing while the Company or LLP notifies the Commission of the information (or any change in the information) received from the PSC.

Is there a penalty for non-compliance?

Non-submission, late submissions and false submissions attract sanctions. The penalty could either be payment of fine or imprisonment upon conviction (for false information) or both. Other sanctions include:

• Reflection of the status of the Company or LLP as “INACTIVE” on the PSC Register and other relevant online portals of the Commission
• Refusal to process any post registration application submitted by the Company or LLP
• Refusal to issue “Letter of Good Standing” to the Company or LLP

What information can the public access on the register?

• Full name of PSC
• Date on which the reportable ownership or control started
• Date of declaration of significant influence or control
• Occupation
• Service address
• Nationality
• Nature of ownership or control in the company or limited liability partnership
• Unique identifier

What is the information required in the Register of Members on PSCs?

• Full name
• National identity number, or international passport number or driver’s license number
• Nationality
• Date of birth
• Place of birth
• Date of death of PSC (where applicable as relates to cessation of significant control)
• Service address
• Residential address
• Telephone number
• Email address
• PEP status (where applicable)
• Occupation or profession
• Nature of ownership or control
• The date on which a person became a person with significant control of the company or limited liability partnership
• Date on which the company or limited liability partnership notified the Commission of the ownership or control interest held by the PSC
• The date on which any person ceased to be a person with significant control
• Any other relevant details the Commission may from time to time require.

Who is a PEP (Politically Exposed Person)?

A PEP is a person that has been entrusted with a prominent public position as well as his or her family members and close associates.

Can a state-owned entity or a company be a PSC?

Yes, a state-owned entity or a company can be a PSC if it fulfils the definition of a PSC in Section 14 of the PSC Regulations. In this case, the information of the Chief Executive Officer (CEO) is required.