What Is The PSC Register?

In April 2016 a new requirement came into effect that required records to be kept of people with significant control over a company (called the “PSC register”). It has essentially meant that private UK companies and partnerships must devise and maintain an accurate register containing the details of any individuals who have significant influence or control over that company or partnership.

What is the PSC register?

The PSC register contains information about individuals that have ultimate control over a company or partnership, including its board of directors and its finances. It’s also about who influences the company the most, and has the biggest say in its direction. People with significant control (PSCs) may not necessarily be company owners or directors - they could be a shareholder or guarantor for example.

The idea behind this legislation is to increase corporate transparency and trust in the UK, as well as to help eradicate money laundering and tax evasion. Companies House is looking to make it abundantly clear to the public and other interested parties who actually owns and controls a UK company, and it has achieved this by making details readily obtainable on this central public register.

Who would be eligible to be a PSC?

A person with significant control (PSC) is a either a person or a relevant legal entity that meets one or more of the following conditions in relation to a specific business. They must:

• Directly or indirectly hold 25% or more of the company’s shares and/or voting rights.
• Directly or indirectly reserve the right to hire or fire a majority of the board of directors.
• Exercise (or have the right to exercise) substantial control or influence over the activities of a trust or organisation which is not a legal entity, but that would meet at least one of these criteria if it were a person.
• Exercise (or have the right to exercise) substantial control or influence over the company or partnership.

The PSC doesn’t necessarily have to live in the UK, as long as they can provide proof of address and a government issued photo ID.

Does my company need to have a PSC on the register?

Yes, most likely. The vast majority of companies do need to have their PSC details entered and it's a criminal offence not to do so. However, some types of companies are exempt from the PSC register requirement. These are typically companies which have voting shares traded on a regulated market in the UK or in the European Economic Area. If they are already having to adhere to certain regulations regarding transparency of ownership, this again may mean the PSC requirement doesn’t extend to them.

How are PSCs entered on the register?

It is essential that your company lets Companies House know the details of your PSC register and informs it of any changes on a regular basis. You must keep your own copy and allow anyone to access it if they wish to.

The Gov website gives further details about identifying your PSC (a company can have one or more PSCs). You must then record their details on your company’s PSC register template and send Companies House this information.

What if my company doesn’t have a PSC?

If registering a person or entity as a PSC isn’t possible, or you believe there isn’t one, this still needs to be entered onto the register. The easiest way to do it is online by adding a statement to that effect. If this then changes in the future, it’s your responsibility to update your PSC register accordingly and again let Companies House know. If, simply for your own information, you wish to record that there was no PSC between certain dates, then you’re free to do so.

Making an update to your company PSC register

Once you have gone to the trouble of creating your PSC register (taking professional advice where needed), it is then your responsibility to make sure it remains up to date. Think of it as a job that’s never quite finished, and which needs regular monitoring. Admittedly this isn’t always easy, especially when there are a million other things to think about, but failing to do so is likely to get you in serious legal hot water. With this in mind, it’s worth allocating it to a member of staff who then has the responsibility of checking and updating your company’s register periodically. They would also need to chase up new PSCs to confirm that their information is correct. Don’t forget, your register should never be completely blank. Also, even if your register is empty at the time the company is created, it’s likely not to be empty indefinitely.

What kind of changes would I need to update on my PSC register?

Below are the specific types of updates you would need to make on your register, before informing Companies House:

• A person is no longer a PSC because they don’t own 25% or more of the company’s shares (or they have sold them all).
• The existing PSC now has less control over changes to the company, giving them less influence.
• A PSC’s personal details have changed, for example they have a new address.
• The company’s name - or the partnership’s name - has changed
• A new PSC has been added to the register, for example because they hold more than 25% of the company’s shares.

What happens if my PSC register isn’t kept updated?

Keeping your PSC register updated with current information is a legal requirement - it isn’t optional. Failure to do so is a criminal offence and likely to result in tough penalties courtesy of HMRC. It’s your responsibility to set up a process by which it is maintained accurately and regularly.

Get in touch

If you would like to discuss anything we have mentioned in this article, please feel free to contact the expert team at Myriad Associates. Call us on 0207 118 6045 or use our contact page and we’ll return your call at a time to suit you.