Register of People with Significant Control

Every company needs transparency about who really controls it. The Register of People with Significant Control (PSC) is a key tool for this. It helps identify individuals or entities that hold significant influence or control over a company. This blog post explains what the PSC register is, why it matters, and how companies and individuals interact with it.

What is the Register of People with Significant Control?

The Register of People with Significant Control is an official record that companies must keep. It lists people or legal entities who have significant control over the company. This includes those who:

• Own more than 25% of the company’s shares

• Hold more than 25% of the voting rights

• Have the right to appoint or remove the majority of the board of directors

• Exercise significant influence or control over the company’s decisions

  
  

The register aims to increase transparency and prevent hidden ownership, which can be used for illegal activities such as money laundering or tax evasion.

Who Must Keep a PSC Register?

All companies registered in the UK, including private limited companies and public limited companies, must maintain a PSC register. This requirement applies regardless of the company’s size or industry. Limited liability partnerships (LLPs) and other business types may have different rules.

Companies must keep the register up to date and make it available for inspection by shareholders and certain authorities. They also need to file PSC information with Companies House, the official government register of companies.

How to Identify People with Significant Control

Identifying PSCs requires careful analysis of ownership and control structures. Here are practical steps companies take:

• Review shareholdings to find anyone owning more than 25% of shares

• Check voting rights attached to shares or agreements

• Look at rights to appoint or remove directors

• Consider any other arrangements that give significant influence, such as trusts or family agreements

  
  

Sometimes, control is indirect. For example, a person may control a company through another company or trust. In such cases, tracing the ownership chain is necessary.

Why the PSC Register Matters

The PSC register plays a vital role in business transparency and accountability. Here’s why it is important:

• Prevents hidden ownership: It stops people from hiding behind complex structures.

• Supports law enforcement: Authorities can trace who controls companies involved in crime.

• Builds trust: Investors, partners, and customers can see who is behind a company.

• Meets legal requirements: Companies avoid penalties by complying with the law.

  
  

For example, a bank may check the PSC register before opening an account for a company to ensure it knows who it is dealing with.

What Information Does the PSC Register Contain?

The register includes specific details about each person with significant control:

• Full name

• Date of birth

• Nationality

• Country or state where the person usually lives

• Service address (can be different from home address)

• Date they became a PSC

• Nature of control (ownership, voting rights, etc.)

  
  

This information helps create a clear picture of who controls the company.

How to Update and Maintain the PSC Register

Companies must keep their PSC register accurate and current. They should:

• Update the register within 14 days of any change

• Notify Companies House within 14 days of updating the register

• Keep records of any attempts to identify PSCs, even if none are found

• Inform PSCs about their inclusion in the register and their rights

  
  

Failing to maintain the register can lead to fines and other penalties.

Challenges in Maintaining the PSC Register

Some companies face difficulties identifying PSCs, especially when ownership is complex or involves overseas entities. Common challenges include:

• Complex ownership chains through multiple companies or trusts

• Unwillingness of individuals to disclose information

• Changes in ownership that happen quickly or informally

  
  

Companies often seek legal advice or use specialized services to ensure compliance.

Practical Example

Imagine a small tech startup with three founders. One founder owns 40% of shares, another owns 35%, and the third owns 25%. The PSC register will list all three founders because each holds more than 25% ownership or voting rights. If one founder transfers shares to a trust, the company must investigate who controls the trust to update the register accordingly.

Final Thoughts on the PSC Register

The Register of People with Significant Control is a powerful tool for transparency. It helps companies, regulators, and the public understand who really controls a business. Keeping the register accurate and up to date protects companies from legal risks and builds trust with stakeholders.

If you are involved in managing a company, make sure you understand your obligations regarding the PSC register. Regularly review ownership and control structures and update the register promptly. This simple step can prevent serious problems and support a culture of openness.