The People with Significant Control (PSC) register – key issues 5 months on...

By Jonathan Miles & Matthew Timmons

The PSC register is designed to ensure that individuals who own or control/influence the running of UK companies and LLPs are identified. Since 6 April 2016, all UK incorporated companies and LLPs have been required to keep and maintain a register of People with Significant Control (“PSC”);

  • Since 30 June 2016, all UK incorporated companies and LLPs are required to disclose their PSC register publically as part of the annual confirmation statement submission to Companies House.
  • Failure to comply is a criminal offence committed by both directors and the PSCs; media interest of the PSC disclosures has increased since 30 June.

The rules have led to some significant shifts for many companies. Key issues we've noted include:

  • A narrow focus on the 25% shareholding condition. It is important that the wider rules are considered because it is not merely ownership which results in a PSC. Individuals who have the right to exercise, or actually exercise significant influence or control over a company may also be PSCs even if they have no legal ownership.
  • Anyone not satisfying any of the first three conditions could still be caught by the PSC provisions in respect of having the right to or actually exercising significant influence or control. Statutory guidance provides explanation and examples of the meaning of 'significant influence or control'.
  • For trusts, the rules need to be considered from the perspective of both the trustees and the trust itself. Individual trustees will be PSCs and corporate trustees will need to be considered to determine their PSC position i.e. clients might be required to look behind the structure of a corporate trustee.
  • Where shareholdings and rights are held indirectly (e.g. via a non-UK company), the 'majority stake' conditions need to be considered. The key difference is that the majority stake conditions are focused on control, with no consideration of ownership of shares.
  • Companies should carefully consider who has control or influence and whether there are joint arrangements or joint interests in place. In cases where two or more people exercise control jointly, whether by formal agreement or by their general practice/custom, their holdings are aggregated to determine whether, jointly, the PSC conditions are met such that each person is treated as holding the aggregated interest. In addition, if two or more people hold shares or rights jointly, they will be treated as holding the total number of shares or rights held by all of them. In the case of a trust meeting the PSC conditions, all of the trustees of the trust are disclosable.

Given the criminal implications for failure to comply, you may want to consider additional support to ensure that the rules are correctly interpreted.

To find out more, watch our webcast by clicking here (available on desktops only).

If you would like to discuss the topic in more detail, please contact us.

Read more articles on