The ‘People with Significant Control’ (PSC) register was introduced on 6 April 2016 and imposes obligations on most companies, Limited Liability Partnerships and Societas Europaea to identify and record details of persons who ultimately own and exercise control over the organisation on a public register. The new rules are implemented by section 21A of the Companies Act 2006, inserted by the Small Business Enterprise and Employment Act 2015, and each entity outlined above has its own set of regulations which set out the finer details of the requirements. The register is one of a number of new measures whose purpose is to improve transparency of UK company ownership and increase trust in UK businesses.

Identifying persons with significant control

A PSC is someone who meets one or more of the following five criteria set out in the legislation:

1. directly or indirectly holds more than 25% of the shares; or
2. directly or indirectly holds more than 25% of the voting rights; or
3. directly or indirectly holds the right to appoint or remove a majority of the board; or
4. otherwise holds the right to exercise or actually exercises significant control; or
5. holds the right to exercise or actually exercises significant influence or control over the activities of a trust or a firm, which is not a legal entity, but itself meets one of the above criteria at 1 to 4..

Organisations affected by the new regime are under an obligation to take reasonable steps to identify persons with significant control and to maintain a PSC register. The register should be kept at the company’s registered office, available for inspection, and details should also be filed at Companies House.

If the company finds that it does not have any PSCs after its investigations, it is still obliged to report that fact. The PSC register cannot be empty. Failure to comply with the legislation is an offence and is punishable by way of fines or imprisonment.

What information is recorded?

The information to be added to the register for an individual includes their name, nationality, service address, country of residence, date of birth and the nature of their control in the company. For a relevant legal entity, the register should include the firm name, registered or principal address, company register details and number and nature of control.

The information must be kept up to date and should be filed at Companies House annually together with the companies confirmation statement.

For more in-depth information regarding the application of the PSC regime in relation to companies and LLPs the Government has published detailed guidance on its website, which can be accessed at: https://www.gov.uk/government/publications/guidance-to-the-people-with-significant-control-requirements-for-companies-and-limited-liability-partnerships.