What is People with Significant Control (PSC)?
A Person with Significant Control (PSC), also referred to as a beneficial owner, is someone who owns or controls a company. You must identify and disclose your PSCs, which could include yourself or others linked to the business. A company can have one or multiple PSCs.
Since 6 April 2016, UK private companies, Limited Liability Partnerships (LLPs), and Societas Europaea (SEs) have been required by law to maintain a PSC register. This register contains information about individuals or entities who hold significant control or influence over the company.
The purpose of the PSC register is to create transparency, facilitate the transfer of important company data, and enhance corporate trust in the UK. The information in the PSC register is accessible to enforcement agencies, other businesses, and the general public. This transparency aims to improve corporate behavior, combat money laundering, and sanction those who hide their ownership or control of UK companies to facilitate illegal activities.
All companies, regardless of size, must keep a PSC register and share this information with Companies House. Companies House, a government agency, is responsible for registering company information, making it available to the public, and incorporating and dissolving limited companies. The PSC register helps Companies House determine who controls a company, which is particularly important in large businesses with complex ownership structures. However, even smaller businesses must comply with this requirement.
Who qualifies as a Person with Significant Control?
A person with significant control (PSC) is an individual (person or registrable legal entity) who meets one or more of the following conditions in relation to a company:
- Directly or indirectly holds more than 25% of the company’s issued share capital.
- Directly or indirectly holds more than 25% of the company’s voting rights.
- Directly or indirectly holds the right to appoint or remove a majority of the board of directors.
- Has the right to exercise, or actually exercises, significant influence or control over the company, LLP, or SE.
- Has the right to exercise, or actually exercises, significant influence or control over the activities of a trust or firm that is not a legal entity but would meet any of the first four conditions if it were an individual.
What does “significant control or influence” mean?
An individual with significant control or influence over a company can be either a person or a legal entity, such as another company or firm. According to guidance from Companies House, “control” and “influence” can be exercised in various ways, including:
- A person directs the activities of a company, trust, or firm.
- A person can ensure that a company, trust, or firm generally adopts the activities they desire.
- A person has absolute decision rights over business-related decisions of the company, such as:
- Adopting or amending the company’s business plan
- Changing the nature of the company’s business
- Making additional borrowings from lenders
- Appointing or removing the CEO
- Establishing or amending any profit-sharing, bonus, or other incentive schemes for directors or employees
- Granting options under a share option or other share-based incentive scheme
- A person has absolute veto rights over decisions related to the running of the business of the company, such as adopting or amending the company’s business plan or making additional borrowings from lenders.
- A person holds absolute veto rights over the appointment of the majority of directors, meaning those directors who hold a majority of the voting rights at board meetings on all or substantially all matters.
- A person who is not a member of the board of directors but regularly or consistently directs or influences a significant section of the board, or is regularly consulted on board decisions and whose views influence decisions made by the board.
- A company founder who no longer has a significant shareholding in the company they started but makes recommendations to the other shareholders on how to vote, and those recommendations are always or almost always followed.
What information is required for the PSC Register?
The information you must obtain, confirm, and enter on your company’s register of People with Significant Control (PSC) will depend on whether the PSC is an individual or a registrable relevant legal entity (RLE).
If the PSC is an individual, you must record the following information about that person:
- Name
- Date of birth
- Nationality
- Country/state of residence
- Service address
- Usual residential address (if the residential address is used as the service address, you do not need to provide it again)
- The date on which the individual became a PSC in the company
- The date on which the PSC register was updated
- Which of the five PSC conditions have been met, with quantification of the interest where relevant:
- For conditions 1 and 2, this must include the level of their shares and voting rights, within the following brackets: over 25% up to 50%; more than 50% and less than 75%; 75% or more
- Any restrictions on the public disclosure of the PSC’s information
If the PSC is a registrable relevant legal entity (RLE), you must record the following information about that RLE:
- Registered name
- Registered office or principal office
- Legal form and the law by which it is governed
- Registration number and the company register on which the RLE appears
- The date on which it became a registrable RLE in relation to your company
- Which of the five PSC conditions have been met, with quantification of its interest where relevant
Who is responsible for maintaining the register of People with Significant Control?
Company directors, secretaries, and designated LLP members are legally responsible for managing their company’s register of People with Significant Control (PSC). Their duties include identifying the PSCs, gathering and verifying their information, maintaining the company’s PSC register, submitting the required PSC details to Companies House using the correct forms, and confirming this information annually on the confirmation statement.
Failure to meet these obligations constitutes a breach of statutory duties and is considered a criminal offense. This non-compliance can lead to serious consequences, including personal fines and, in some cases, imprisonment for up to two years. Therefore, it is crucial to comply with the requirements to avoid such penalties.
How to update the PSC Register and notify Companies House
Since 30th June 2016, the Companies Act 2006 requires all new companies to submit their PSC status at the time of incorporation. If any changes occur to this status, the company must update its register of People with Significant Control within 14 days. Additionally, the company must notify Companies House of these changes within another 14 days of updating the PSC register. This ensures that both internal records and public filings remain up to date.
This process is the ‘14+14 rule,’ which requires companies to update both their PSC register and the records at Companies House within 28 days of any changes to the company’s PSC status. Specifically, companies must update their internal PSC register within 14 days of the change and notify Companies House within the following 14 days, ensuring timely and accurate updates.
You can do the filings to Companies House using forms PSC01 through PSC09. Furthermore, when a company files a confirmation statement (CS01), they are confirming that the PSC information on the public register is accurate and current.
Do I still have to maintain other statutory company registers?
Yes, the PSC register does not replace other statutory registers. Companies must continue to maintain records for directors, shareholders, and guarantors. These records complement the PSC register and help companies meet broader legal obligations.
Can I leave the PSC register empty?
No, you must never leave the PSC register empty. If there are no individuals or entities who qualify as PSCs, you must enter the following statement:
“The company knows or has reasonable cause to believe that there is no registrable person or registrable relevant legal entity in relation to the company.”
This ensures transparency, even if no PSC exists.
How long do I have to keep PSC information?
Companies must keep PSC information for 10 years after a person ceases to be a PSC. Additionally, Companies House stores this information permanently to ensure long-term corporate transparency.
Inspection of register of People with Significant Control
You must keep the PSC register at your registered office or a Single Alternative Inspection Location (SAIL). It must be available for inspection when requested. Companies House must be notified of the location of your PSC register.
Anyone can request to inspect the register free of charge, or they can obtain a copy for a fee of up to £12. However, you must protect the privacy of PSCs by ensuring their residential addresses remain confidential during any such requests.
By properly maintaining and updating your PSC register, you ensure that your company stays compliant, transparent, and accountable. This not only helps your business meet legal requirements but also builds trust with the public and regulatory authorities.
For more details, check out the Startxpress Help Center and Blog.
If you have any more questions or need further assistance, feel free to reach out to us via support@startxpress.io. Our team is here to support you every step of the way.
Related Articles
Was this helpful?
0 / 0