UK companies are required to register all of the people with significant control (PSCs) within their business. But what constitutes a PSC, and how do you register? Our guide is here to help.
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In April 2016, the UK Government introduced a legal requirement for all UK private companies (as well as limited liability partnerships and Societas Europaea) to keep a register of information about the people who control the enterprise.
This requirement is known as the people with significant control (PSC) register. It was introduced to improve transparency and trust by clarifying who owns and controls UK businesses.
If you run a company where you're the only person involved, figuring out the person with significant control isn't difficult. But as soon as several decision-making owners or shareholders are added to the mix, things can get more complicated.
In this guide, we'll help you figure out who your PSCs are, and how to register persons with significant control on the government database.
Who is a person with significant control (PSC)?
There are five conditions detailed for PSC qualification. If a person within your company meets any one of them, then they are a PSC and need to be added to your register.
The first three conditions are pretty straightforward. They are:
- someone who has more than 25% of shares in the company
- someone who has more than 25% of voting rights in the company
- someone who has the right to appoint or remove the majority of the board of directors
So far, so simple. The following two conditions are a little more complicated. They are:
- someone who has significant control or influence through other means
- a trust or firm which controls the company
To clarify these, we look at both in a little more depth below.
What is 'significant control or influence'?
There might be a person who directs activity in your business, but who doesn't fit the above criteria. The government still considers them a PSC, and they should be on your register.
The phrase 'significant control or influence' is quite ambiguous. Helpfully, Companies House has provided a list of examples, which you can find here.
Below is a small selection of the government's list: A person can be said to have significant control or influence include if they:
- direct the activities of the business
- have the right to veto decisions related to the running of the business
- are a company founder who no longer has significant shares in the business but can still make recommendations
- regularly direct or influence a considerable section of the board, despite not being a board member themselves
- have the right to appoint or remove a CEO
What if a trust or firm controls my company?
In some cases, a trust or different firm might influence or control your business in the ways we've discussed above. If that's the case, any person who controls that trust or firm should be added to your PSC register.
This part of the regulation can get complex. As such, the government recommends that you get professional advice if you fall into this category.
The information you'll need for PSC registration
You can send your PSC information to Companies House. There are certain details you'll need to hand when you come to record them, including the date you became a PSC of the company and which conditions of control are met. Of course, your accountant will sort this for you as part of your confirmation statement.
You'll also need to include the level of shares and voting rights of any people you're adding to the register.
Protecting PSC register information
It's worth noting that, apart from home addresses and day of the date of birth, all PSC information is available to the public.
If there are exceptional circumstances (such as a risk of violence or intimidation), then individuals can apply to get their PSC information protected. Always note any applications or if protection has been granted when adding someone's details to your PSC register.
As with any legal compliance requirements, it's essential that you stay on top of your PSC register as your business grows or changes. Fortunately, now that you've read this guide, you're informed for the future.
If you need further advice on PSC registration or any other element of your business's legal requirements, fill in our contact form and a member of our team will call you back.