PSC Register – all UK companies to create and maintain.
Register of People with Significant Control
A new requirement has been introduced for all companies registered in the UK to create and maintain a register of people with significant control (PSC Register). The intention behind this new requirement is to create transparency around who has actual control (via voting rights) or who ultimately benefits (via shares) from a company.
Who does this affect?
This requirement is wide reaching and applies to all companies including companies limited by guarantee with charitable status and dormant companies. The only exception is for companies listed on the stock exchange and, of course, this requirement does not apply to corporate entitles who are not registered companies (such as SCIOs, partnerships, community benefit societies etc).
What do you need to do?
The requirement is to create and maintain a register showing people, and relevant legal entities, that have significant control in a company. The PSC Register has to be available to members of the public to view, free of charge, at any time (although if a copy is requested a flat £12 charge can be applied). This PSC Register will also need to be filed with Companies House on an annual basis as part of the Confirmation Statement (otherwise known as an Annual Return).
Who is a PSC?
There is significant guidance around this question and, if you are in any doubt about who may be a PSC in your company then you should contact us but, essentially “control” is having the power to direct a company’s, trust’s or firm’s policies and activities and “significant influence” is having the ability to ensure that the company, trust or firm adopts the policies or activities desired by the holder of the significant influence. Individuals: practically speaking, an individual is a person with significant control if one or more of the following conditions applies: (i) they hold, directly or indirectly, more than 25% of a company’s shares; (ii) they hold, directly or indirectly, more than 25% of the voting rights (this highlights a need for clarity in the Articles of Association regarding membership and membership rights, particularly in the voluntary sector); (iii) they have, directly or indirectly, the right to appoint or remove a majority of the board of directors; (iv) they actually exercise or have a right to exercise significant or control; and/or (v) they actually exercise or have a right to exercise significant influence or control over a trust or firm, and that trust or firm meets any of the above criteria and would therefore be a PSC if it were an individual. In this case, the individuals need to be entered in the PSC register, not the trust or firm. Relevant Legal Entities: a Relevant Legal Entity (RLE) may need to be included on the PSC Register if it is a legal entity; would meet the definition of a PSC if it were an individual (as above), and is required to maintain its own PSC register (or would be if it was not a company exempt from maintaining one).
A common example of an RLE being required to form part of a PSC Register would be where a charitable company is the sole member of its trading company, or if it has the right to appoint or remove the majority of the trading company’s directors.
It is worth noting that there is an obligation on a PSC to respond to notices from the company requesting information, to notify the company that they are or might be a PSC/RLE if they believe they might be but are not in the company’s PSC register and have not received a notice from the company asking for information and to keep their information up to date.
If this briefing applies to you and you wish to discuss the impact upon your company, review your Articles of Association or discuss our company secretarial service then please contact Corra Irwin.
This information in this publication only is based on our current understanding of the Law. It has been produced for information purposes only. Professional advice should always be sought before taking any action.
MacLeod and MacCallum cannot take any responsibility for loss incurred for acting or failing to act on the basis of anything contained in this publication.