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Person of Significant Control - frequently asked questions
From 6th April 2016, unlisted UK companies and Limited Liability Partnerships (LLPs) have been required to create and maintain a register of people with significant control (PSC). This is a register of people who have significant control over the company or partnership. that is filed at Companies House.
Why was this introduced?
The introduction of the PSC register was one of a number of changes to the Companies Act 2006 brought about by the Small Business, Enterprise and Employment Act 2015. The aim of the Act is to create greater transparency in the ownership and control of UK companies, to help in the fight against money laundering, whilst increasing trust in UK companies.
Does my company have to have a PSC register?
All UK companies, including companies limited by guarantee, and UK LLPs have to keep a PSC register. Only companies that already disclose information about ownership of shares under the FCA's Disclosure and Transparency Rules (DTR5 issuers) are exempted from keeping the register.
Who can be a PSC?
A PSC can be an individual or a Relevant Legal Entity (RLE). Individuals may meet one or more of the first three conditions below through direct or indirect shareholdings. An RLE is a legal entity that keeps its own PSC register or whose voting shares are admitted on a regulated market in the EEA (other than the UK), or on specified markets in Switzerland, the USA, Japan and Israel. A RLE is “registrable” if it is the first RLE in the company’s ownership chain, otherwise it is non-registrable.
If the RLE is non registrable, scrutiny of the full group structure is required until an individual or registrable RLE can be identified as the PSC.
How do I identify a PSC?
There are 5 separate conditions, any one of which will result in an individual or RLE being registrable on the PSC register.
Condition 1: holds, directly or indirectly, more than 25% of the shares in the company. The 25% threshold is calculated by reference to the nominal value of the shares in the case of a company with a share capital.
Condition 2: holds, directly or indirectly, more than 25% of the voting rights in the company.
Condition 3: holds the right, directly or indirectly, to appoint or remove a majority of the board of directors of the company.
Condition 4: has the right to exercise, or actually exercises, significant influence or control over the company.
Condition 5: exercises significant influence or control over the trustees of a trust or partners of a firm, where that trust or firm is not a separate legal entity, but where those trustees or partners would otherwise meet the conditions above.
What information do I need?
For an individual:
- Service address
- Usual country/state of residence
- Date of birth
- Usual residential address (this will not appear on the public record)
- Date on which the individual became registrable
- Nature of control
For a relevant legal entity:
- Corporate/firm name
- Registered/principal office
- Legal form and governing law
- Applicable company register and number
- Date on which the legal entity became registrable
- Nature of control
What are the options if I believe the company does not have a PSC or the PSC has not been identified?
On your company's own PSC register you must always have information about your company's PSCs or registrable RLEs, or an update on the status of your company's investigations. It must never be empty. When you cannot get information about your company's PSCs your company's PSC register must make that clear. You should choose from the statements below which one applies to you. When a statement ceases to be true you must note this along with the date on which it ceased to be true and insert new information as appropriate. The appropriate PSC form must be completed and filed at Companies House, to update the PSC information showing on the public file.
- 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.
- The company knows or has reasonable cause to believe that there is a registrable person in relation to the company but it has not identified the registrable person.
- The company has identified a registrable person in relation to the company but all of the required particulars of that person have not been confirmed.
- The company has not yet completed taking reasonable steps to find out if there is anyone who is a registrable person or a registrable relevant legal entity in relation to the company.
- The company has given a notice under section 790D of the Act which has not been complied with.
What is meant by ‘Other legal entitity'?
The law makes special provision where a company is owned or controlled by an ‘other Registrable entity' such as:
- A government or government department (local or national);
- An international organisation whose members include two or more countries,
- territories or their governments; or
- A corporation sole (a legal entity consisting of a single incorporated office occupied by
- a single person).
What about non-compliance?
PSCs themselves have an obligation to notify the company within one month of becoming a PSC. They commit an offence if they fail to notify or respond to a notice from the company. In addition, the company may apply sanctions in relation to shares held by the PSC and the rights attached to those shares. Failure to comply may result in the company and its directors committing an offence.
What if my PSC does not want their details on the public record?
Talk to us about reviewing your corporate structure or alternatively, the PSC may consider applying under the Companies House protection regime. This regime is intended to protect those PSCs, or a person who lives with a PSC, from public disclosure where such disclosure may put them at serious risk of violence or intimidation.
PSC Service Address
An individual's residential address can be replaced with a ‘Service Address' on the public record without applying via the Companies House protection regime.
Vistra can also provide a service address for an additional fee. Call our Formations team on 0117 9181391 to find out more.