Calling in isn’t for everybody, so we thought it would be a good idea to share answers to our most popular questions on a monthly basis.
See our other helpline articles here.
What is a PSC?
The PSC regime came into force earlier in 2016 to try and make ownership of UK businesses more transparent.
A ‘Person of Significant Control’ (or PSC) is an individual who meets one or more of the following 5 conditions in relation to a private limited company:
- holds over 25% of the shares
- holds over 25% of the voting rights
- has the sole right to appoint or remove directors
- otherwise has the right to or exercises ‘significant influence or control’ over a company
- has the right to or exercises ‘significant influence or control’ over a trust or firm
that itself meets any of conditions 1) to 4) above in relation to the company.
What this means in practice can be complicated, and Companies House has full guidance on what these conditions actually mean.
If a company has any PSCs, this must now be registered at Companies House on formation or in the Confirmation Statement (filed at least once a year).
Companies must also keep their own internal register of PSCs. Similar rules apply to companies without a share capital and LLPs.
We get a lot of queries about PSCs, if you have a specific question please check out our PSC guide or call our helpline. However, we can clear up a few common misconceptions:
Q: Can a company be a PSC?
A: No, a PSC must be an individual.
A UK corporate shareholder can be registered as an ‘RLE’. This means that you don’t have to work out if there are any PSCs behind this as the RLE will do that work for you.
However, an offshore company cannot usually be registered as a RLE.
If there is an offshore company holding shares in your company, you will therefore need to look behind this to work out if there are any PSCs
Q: Does a company have to have a PSC?
A: No, if no person meets any of the PSC conditions above the company has no PSCs. This can be stated at Companies House.
Q: Can I appoint Mr X as the PSC to give them control of the company?
A: this isn’t how the law works. A person is a PSC if they meet one of the 5 conditions above, unlike directors or shareholders this is not a position you are ‘appointed to’.
This also means that registering someone as a PSC doesn’t give them ‘control’ of the company – it is the fact that they have ‘control’ that makes them a PSC!
Q: I think Miss Y is a PSC because she is a director and therefore has ‘significant influence or control’.
A: Just being a director of a company doesn’t mean you have ‘significant influence or control’ of the sort meant by PSC conditions 4) or 5).
‘Significant influence or control’ has a particular meaning, and Companies House has published statutory guidance on this.
A director could be a PSC under these conditions, but not in every case.
At Quick we’re always happy to help. Should you have any questions please do not hesitate to contact us by email or phone. Alternatively, visit our FAQs and Guides.
Telephone: 0844 376 3333