Persons with Significant Control (PSC)
The vast majority of UK unlisted companies and Limited Liability Partnerships (LLPs) are now required to maintain a register of the people who have significant control over them. This new regime aims to increase the transparency of who owns and controls UK entities and there is a requirement to take reasonable steps to identify those “persons with significant control” and record their details in a new statutory register. This new register is known as the “PSC register”.
A person with significant control is defined as an individual who meets one or more of the following conditions:
1) Ultimately owns or controls more than 25% of a company’s shares (or more than 25% of an LLP’s assets);
2) Holds more than 25% of the voting rights;
3) Has the right to appoint or remove the majority of the board of directors;
4) Has the right to otherwise exercise significant influence or control over a company, LLP or Trust that meets one of the above three conditions.
A company is owned by a brother and sister. They both have equal ownership and voting rights in the company. This means they each meet:
• Condition 1 – They own more than 25% of the shares;
• Condition 2 – They hold more than 25% of the voting rights.
Both siblings must be entered on the Company’s PSC register.
What about corporate shareholders?
If a company is owned or controlled by a legal entity and not an individual, the PSC register may need to state the legal entity on the register if it is a “relevant legal entity (RLE)”. A legal entity is relevant if:
• Had it been classed as an individual it would have met one of the conditions for being a PSC;
• Maintains its own PSC register that is itself covered by the PSC regime or by an equivalent disclosure regime.
The PSC register must be kept up to date and be available for public inspection and from 30 June will be visible online via Companies House as part of the new Confirmation Statement (which replaces the Annual Return).
If you have any queries or concerns regarding the introduction of the new PSC register or would like help putting systems in place, please speak to our Audit Partner, Peter Atkinson on the details below:
direct dial: 01942 292503
mobile: 07730 436069