What is a PSC (Person with Significant Control)?

In the UK, transparency in company ownership is a legal requirement. A Person with Significant Control (PSC) is someone who holds substantial influence or control over a company. Identifying PSCs helps maintain corporate accountability and prevents misuse of companies for illegal purposes, such as money laundering.

Who Qualifies as a PSC?

A PSC can be an individual or, in rare cases, a legal entity that meets one or more of the following conditions:

1. Direct Ownership

   • Owns more than 25% of the company’s shares.

2. Voting Rights

   • Holds more than 25% of the company’s voting rights.

3. Right to Appoint or Remove Directors

   • Has the authority to appoint or remove a majority of the board.

4. Significant Influence or Control

   • Exerts significant influence over the company’s decisions, even if they do not meet the shareholding or voting thresholds.

5. Trust or Legal Entity Ownership

   • Has the right to exercise or direct the exercise of significant control over a trust or legal entity that holds shares in the company.

Why Identifying PSCs Matters

The PSC register was introduced as part of the Small Business, Enterprise and Employment Act 2015 to increase transparency in company ownership. Key benefits include:

• Preventing Fraud: Reduces the risk of companies being used for money laundering or other illegal activities.

• Enhancing Transparency: Provides stakeholders, banks, and authorities with a clear view of who controls a company.

• Legal Compliance: Ensures companies comply with Companies House regulations.

Company Obligations

Limited companies must:

1. Maintain a PSC Register

   • Keep an internal register of all PSCs and update it whenever changes occur.

2. File PSC Information with Companies House

   • Include details such as the PSC’s name, date of birth, nationality, service address, and nature of control.

3. Update the Confirmation Statement

   • Every 12 months, the Confirmation Statement must confirm that PSC information is accurate and up to date.

Penalties for Non-Compliance

Failure to maintain or submit accurate PSC information can result in:

• Fines for the company and its officers.

• Criminal prosecution of directors.

• Potential reputational damage and regulatory scrutiny.

Final Thoughts

A PSC (Person with Significant Control) is a legally defined individual or entity that holds substantial control over a company. Maintaining accurate PSC records is not only a legal requirement but also a critical aspect of corporate transparency and governance. For UK limited companies, ensuring a timely and correct Confirmation Statement is essential to reflect PSC changes and maintain compliance with Companies House.