Out-Law / Your Daily Need-To-Know

Out-Law Guide 4 min. read

Setting up a PSC register for your company

Certain UK companies and limited liability partnerships (LLPs) will be required to maintain a new statutory register of people with significant control (PSC register) from 6 April 2016.

This guide was last updated in February 2016

Introduced by the 2015 Small Business, Enterprise and Employment Act and supplemented by regulations and guidance, the PSC register is a register of individuals and legal entities that have significant control over a company. It is designed to ensure that those that are the ultimate owners or controllers of a company are identified with details of their interests made public; and to deter and impose sanctions on those that hide their interests.

The PSC register was developed in line with the proposal made by the UK at the 2013 G8 summit to increase the transparency surrounding the ownership of companies. The EU has adopted similar measures via the Fourth Money Laundering Directive, which must be implemented by all member states by 26 June 2017.

Who needs to maintain a PSC register?

The obligation to maintain a PSC register applies to all UK companies, including dormant companies, and LLPs with some exceptions:

  • those subject to the disclosure requirements of the FCA's Disclosure and Transparency Rules – that is, London Stock Exchange main market and Alternative Investment Market (AIM) companies;
  • legal entities with voting shares admitted to trading on a regulated market in the UK or EEA; or on specified markets in Switzerland, the USA, Japan and Israel. However, UK subsidiaries of these entities will be required to keep a PSC register.

There are criminal penalties for companies and their officers for non-compliance.

Where do I start?

You are required to take reasonable steps to find out whether there are people that have significant control or influence over the company. Non-exclusive examples of reasonable steps are set out in draft statutory guidance (14-page / 838KB PDF) and include reviewing the register of members, articles of association and any shareholder agreements. You must then contact these people, or others who might know them, to confirm that they meet one or more of the criteria and to obtain the relevant information to go on the PSC register.

The information on your PSC register will need to be filed at Companies House on or after 30 June 2016 when filing the company's confirmation statement - the replacement for the annual return. The information on the PSC register must be kept up to date.

Your PSC register must be kept either at the company's registered office; or at another location which the company has notified to Companies House. 

Who is a person with significant control?

A PSC is an individual who meets one or more of the following conditions:

  • directly or indirectly holds more than 25% of the shares;
  • directly or indirectly holds more than 25% of the voting rights;
  • directly or indirectly holds the right to appoint or remove the majority of directors;
  • has the right to exercise, or actually excises, significant influence or control;
  • has the right to exercise, or actually exercises, significant influence or control over the activities of a trust or firm which is not a legal entity, but which would itself satisfy any of these conditions if it was an individual.

Both the Small Business, Enterprise and Employment Act and the accompanying regulations contain detailed provisions relating to the interpretation of these conditions. The government has also published draft statutory guidance on the meaning of significant influence or control.

What about corporate shareholders?

If the company is owned by a legal entity and not an individual, your PSC register may need to include that legal entity if it is both relevant and registrable.

A relevant legal entity (RLE) is one which:

  • would have been classed as a person with significant control had it been an individual; and
  • has to maintain its own PSC register, is subject to the FCA's disclosure and transparency rules or has voting shares admitted to trading on a regulated market in the UK or EEA.

An RLE is registrable in relation to a company if it is the first relevant legal entity in the company's ownership chain. If the legal entity in question is not a registrable and relevant legal entity, it will not appear on the PSC register and the company will need to look further up the chain of ownership to identify any registrable PSC.

What information needs to be included?

Once a PSC has been identified, you must obtain and then confirm the following details about that individual on the PSC register:

  • name;
  • date of birth;
  • nationality;
  • country, state or part of the UK where the PSC usually lives;
  • usual residential address;
  • the date on which the individual became a PSC in relation to the company;
  • which of the conditions in relation to significant influence and control the individual meets; and
  • any restrictions on disclosing the PSC's information that are in place.

Only confirmed information on individual PSCs should be entered on the register. Information is treated as confirmed if:

  • the PSC supplied the company with the information;
  • the information was provided to the company with the knowledge of the PSC;
  • you asked the PSC to confirm the information was correct, and the individual did so;
  • you hold previously confirmed information and have no reason to believe it has changed.

What if I can't find information to determine who the PSCs are?

The company is entitled to serve notice on anyone it believes has information that will help identify a PSC or relevant legal entity. Notices require the addressee to respond within a month. If they fail to do so, they commit a criminal offence. If they fail to respond to an additional notice, you can impose restrictions on shares.

While investigations remain ongoing, you must enter this fact and the stage that you have reached on the PSC register.

What if there are no PSCs?

The requirement to maintain a statutory PSC register applies whether the company has PSCs or not. If reasonable steps have been taken to identify the existence of a PSC, and the company is comfortable there are no individuals or legal entities which qualify as such, this fact must be noted on the PSC register.

According to the guidance, the register must say: "The company knows or has reasonable cause to believe that there is no registrable person or registrable relevant legal entity in relation to the company".

Can I leave the PSC register blank if I don't have the relevant information?

You must not leave the register blank. The guidance sets out the official wording which must be entered both on the company’s own PSC register and when filing information on the central public register at Companies House. This wording is in addition to the relevant information entered on the register.

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