Register of People with Significant Control

Register of People with Significant Control (PSC Register)

In 2016, new regulations were introduced to increase the level of transparency for registered companies and partnerships. Companies House now request that registered businesses provide information on the people with control over the company. In addition to shareholders, partners and directors, you must also confirm anyone who has a controlling interest.

The PSC Register is a record of all persons and corporate entities with significant control in a registered business. It has been introduced to increase transparency for UK registered businesses. In the past it had been possible to register a UK business with nominee directors and shareholders in place, thus keeping the real beneficial owners details off of the public record at Companies House. The PSC register requires all UK registered businesses, covered by the legislation, to keep a register of these previously hidden controllers or beneficiaries. If you have control over a company, your name must be added to the register!

More here..

Limited companies and LLP’s need to identify any person with significant control (PSC) are. These PSC’s must then be entered onto the business’s own PSC register and also notified to Companies House. For the vast majority of businesses with very simple structures this will be a very straight forward process.

In 2018 these rules were also extended to Limited Partnerships.

More here..

A PSC is by definition a person, and not a legal entity (such as a company or a Limited Liability Partnership (LLP)). But a company or LLP might be owned or controlled by another legal entity and not an individual. This can be a confusing part of the legislation to apply correctly but the basic principal is that if company A is the controller of company B and company A maintains a transparent register of controllers then company A can declared as a PSC for company B. The reasoning is that an interested party can see company A is the PSC and can then look at company A’s own PSC register and see who the real PSC persons are behind that company. It is therefore still transparent who controls company B from company A’s PSC register.

A legal/corporate entity’s details can be declared as the PSC if it meets any one or more of the conditions:

  • It keeps its own PSC register
  • It is subject to Chapter 5 of the Financial Conduct Authority’s Disclosure and Transparency Rules (DTRs) 8
  • It has voting shares admitted to trading on a regulated market in the UK or European Economic Area (other than the UK) or on specified markets in Switzerland, the USA, Japan and Israel.

If the legal entity does not meet any of the above criteria you cannot enter that entity as the PSC on the register of the UK Company as this is not transparent. You would need to identify the ultimate controllers behind the entity and they would be the PSC’s entered on to the UK company register.

If a company or LLP does not know who its PSC’s are then it must take reasonable steps to find out. This will typical involve sending notices to any know persons or advisors that the company or LLP feels may be able to supply the information. The notices must give no more than one month to reply. 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. If the PSC information is still unknown after notices have been issued a company or LLP can consider placing restrictions on the PSC.

Applying restrictions is a significant step which can only be taken if the steps described in the legislation have been properly taken. Your company or LLP is not required by law to impose restrictions, but you must seriously consider doing so as part of the legal requirement for you to take reasonable steps. If your company is in this situation and chooses not to impose restrictions, you should be able to justify your decision.

We recommend any company or LLP considering restrictions on a possible PSC should review the full legislation carefully and seek advice from a specialist company lawyer before implementing any restrictions.

A company or LLP that does not know who its PSC’s are must record this in its PSC register and at Companies House using one of the following statements –

  • PSC exists but have not been identified
  • PSC details are not confirmed
  • PSC contacted but no response
  • Restrictions notice issued to PSC

If you have a nominee structure in place then you need to declare the real controllers and beneficiaries of the company or LLP on the PSC register if their control exceeds the limits specified under ‘Nature of Control’. It is an offence to declare a nominee as a PSC if this hides the identity of a real PSC that would otherwise be declared. This is a criminal offence and can lead to prosecution for the persons involved.

The PSC register has been designed to make UK limited companies and LLP’s a transparent and trusted business entity.

A company can have no PSC’s and this should be declared at Companies House that there are no PSC’s registerable.

A typical example of when this might happen for a company is if there are 5 or more shareholders all holding 20% of the shares. No single shareholder has significant control as all shareholders own less than 25% each.

For an LLP that has 5 designated members with equal rights and control over the LLP there would be no PSC with 25% or more control.

A company or LLP that has no PSC’s must record this in its PSC register and at Companies House. It is not permitted to leave the PSC register blank.

All PSC person’s residential addresses and day of birth (not the month or year) are suppressed on Companies House records and should be held on a separate private company PSC register as standard. If a company feels its PSC’s may be at risk of intimidation or violence as a result of their information being recorded in the PSC register then the company or the PSC can apply to have the information further suppressed. This is only possible in exceptional circumstances. There are rules in place to suppress just the residential address from the credit reference agencies or the full PSC details can be suppressed if necessary.

If you incorporated your company using our service from the 06 April 2016 onwards we will supply you with a PSC register in the company documents produced by our system. If you have registered your company with a service that does not supply a PSC register then you may need to purchase a company register.

For further information on PSC’s and how to record them for your company or LLP please contact Companies House or your company formation agent. Unfortunately we cannot offer free advice on completing your PSC register unless you registered your company using our service.

psc meeting in boardroom