The Register of Persons with Significant Control (PSC), are you ready?

4 April 2016

From 6 April 2016 anyone who has to file information with Companies House will be required to keep a register of Persons with Significant Control (PSC). This is in addition to the register of members and the register of officers which were reported to Companies House on the Annual Return, usually on the anniversary of the Company’s incorporation.

From 30 June 2016 onwards the register of Persons with Significant Control (PSC) will need to be filed with Companies House on what will be called the Confirmation Statement which replaces the Annual Return.

So who is classed as a Person with Significant Control?

A PSC is an individual who meets one or more of the following conditions in relation to your company:

1. Directly or indirectly holds more than 25% of the shares
2. Directly or indirectly holds 25% of the voting rights
3. Directly or indirectly holds the right to appoint or remove a majority of directors
4. Otherwise having the right to exercise, or actually exercising, significant influence or control
5. Having the right to exercise, or actually exercising, significant influence or control over the activities of a trust or firm which is not a legal entity, but would itself satisfy any of the first four conditions if it were an individual

Let’s look at a couple of examples:

1. Company A has two 50% shareholders. The company therefore has two PSC’s under I. and II above and these would be stated on the PSC register.
2. Company B has five 20% shareholders. It therefore has no PSC’s, assuming there are no shareholding arrangements between the individuals, and would make a statement that there were no PSC’s on the Confirmation Statement.

Companies owned or controlled by legal entities

A PSC is by definition an individual. However, your company might be owned by a legal entity such another Limited Company and/or a LLP.  If this is the case, the legal entity must be included on the PSC register, but only if it is relevant and registerable.

A legal entity is relevant in relation to your company if:

• It keeps its own PSC register;
• It is subject to Chapter 5 of the Financial Conduct Authority’s Disclosure and Transparency Rules;
• It has voting shares admitted to trading on a regulated market in the UK or EEC or on markets in Switzerland, the USA, Japan or Israel

A relevant legal entity should be registered by your company if it is the first relevant legal entity in your company’s ownership chain.

So what action will you need to take?

For most Companies and LLP’s it will be obvious who should be included and reported to Companies House as it will be detailed on the Confirmation Statement.

Where there are groups of companies, it may take a little more thought to see if there is a relevant and registerable legal entity that needs to be included on the PSC register.

If you would like advice as to who should be included on your register of Persons with Significant Control, please contact us and we will be happy to advise who you include.