In this guide to the PSC register we explain:
- What is the PSC register?
- What are the requirements for the PSC register?
- PSC register exemptions
- Is a director a person with significant control?
- Does a limited company have to have a PSC?
- Can the PSC register be viewed by anyone?
- When you need to update the PSC register
- The PSC register and joint shareholders
- The PSC register and nominee shareholders
What is the PSC register?
Most UK companies (whatever their size), limited liability partnerships and Societates Europaeae (a type of European public companies registered in the UK) must keep a register of all people who have ‘significant control’ over them (PSCs). Its purpose is to make sure that the ownership and control over UK corporate bodies is transparent, as a means to prevent money-laundering and tax evasion, and to assist in law enforcement.
There are criminal sanctions for failure to maintain a PSC register.
What are the requirements for the PSC register?
The PSC register is a record that must be kept by most UK companies. Newly incorporated companies will complete a PSC register upon first registration.
To create a PSC register you must:
- Prepare a register in which your PSCs can be listed. This doesn’t need to be in any particular format, and can be in hard or electronic. It must however clearly identify your PSCs and contain certain official wording in relation to them
- Identify who are your PSCs
- Fill out the register
- Keep the register up to date and notify Companies House of any changes
- Make sure it’s accurate
- Make the register available for inspection
People, other legal bodies such as companies, and governmental bodies can be PSCs.
A PSC is someone who meets one or more of the following conditions in relation to the company:
- Holds, directly or indirectly, more than 25% of the shares of a company
- Holds directly or indirectly more than 25% of the voting rights
- Holds directly or indirectly the right to appoint or remove the majority of the board of directors
- Has the right to exercise (or is in fact exercising) significant influence or control over the company
- Is someone who has the right to exercise (or is in fact exercising) significant exercise or control over a trust or firm that itself exercises at least one of these conditions.
In the case of an LLP, similar rules apply, except that the ownership of shares is replaced with the right to share in more than 25% of the LLP’s surplus assets on a winding up.
The information to be included in the PSC register is:
- The name and date of birth of each PSC
- Their nationality and country of residence
- The address for service of legal documents (such as their registered office) or their residential address
- When they became a PSC
- The date they were entered on the register
- What are the conditions for their being a PSC
- Details of their shares and voting rights
PSC register exemptions
There are exemptions from the requirement to keep a PSC register – the regime doesn’t apply to public companies whose voting shares are traded on a regulated market in the UK (the Main Market of the UK Stock Exchange) or EU and certain other foreign exchanges. Previously companies who were listed on the AIM were exempt, but these are now subject to the PSC regime.
Is a director a person with significant control?
Directors will be PSCs if, as well as being directors, they meet any one of the conditions, for example, they also hold more than 25% of voting shares of a company, as would normally be the case in small companies and for the founders of start-ups.
If a director doesn’t hold any shares, they will not necessarily be deemed to be exercising significant control over the company just because of their role as a director.
However, you need to look at all of the ways in which the director is involved with the company to decide if they are in fact a PSC. For example, a director may supply the company with goods or services that are vital to the company’s operations, and in that case they could be deemed to have significant influence or control over it and be a PSC.
Does a limited company have to have a PSC?
Unless the limited company has its voting shares listed on the Main Market of the London Stock exchange, it will have to have a PSC.
Can the PSC register be viewed by anyone?
Yes, you must keep your PSC available for inspection by the public, and provide a copy of it on request. You can also elect to have your PSC register available at Companies House.
When you need to update the PSC register
If you need to make changes to your PSC register, you have 14 days from the date you receive the new information to update the register, and another 14 days to notify Companies House. If you have elected to hold your register at Companies House, you must update it online.
The PSC register and joint shareholders
Joint shareholders are each considered to be PSCs.
The PSC register and nominee shareholders
According to guidance published by the Department for Business, Innovation and Skills, where you have shares that are held by nominees (this is usually because someone wants to keep their shareholding anonymous), then you should treat the shares as if they were held by the person for whom the nominee is acting. If that person is PSC because they meet one of the conditions, then they should appear on the register.