Persons with Significant Control Register – what is it and what do you need to do?

There is now a requirement (effective from 6th April 2016) for all companies and Limited Liability Partnerships (LLPs) to create and maintain a register of person(s) with significant control (PSC). From 30th June 2016, there will be a requirement for companies and LLPs to include this information in a confirmation statement. If a company is registered on or after 30th June 2016, the company or LLP will need to include a statement of initial significant control.

What is a PSC Register?

A PSC register is a record of ‘person(s)’ who are deemed to have ‘significant control’ over a company.

Identifying PSCs

A person with significant control may be:

• An individual

• A deemed individual under section 790C(12) of the Companies Act 2006 (“CA 2006”)

• A “relevant legal entity”

A person is deemed to have “significant control” if they meet the ‘specified conditions’ set out in Part 21A of the CA 2006.

A company has an obligation to confirm the “registrable person(s)” details before they are inputted onto the register.

Nature of the control (the specified conditions)

A person will be classed as having significant control/influence if the following requirements are met:

• X holds, directly or indirectly, more than 25% of the shares in Y (paragraph 2, Schedule 1A, CA 2006) (first specified condition).

• X holds, directly or indirectly, more than 25% of the voting rights in Y (paragraph 3, Schedule 1A, CA 2006) (second specified condition).

• X holds the right, directly or indirectly, to appoint or remove a majority of directors of Y (paragraph 4, Schedule 1A, CA 2006) (third specified condition).

• X has the right to exercise, or actually exercises, significant influence or control over Y (paragraph 5, Schedule 1A, CA 2006) (fourth specified condition).

• X has the right to exercise, or actually exercises, significant control or influence over the activities of a trust or firm that, in each case, does not have legal personality under its governing law, where the trustees or members of that trust or firm meet any of conditions one to four (in their capacity as such) in relation to Y, or would do so if they were individuals (paragraph 6, Schedule 1A, CA 2006) (fifth specified condition).

If an individual meets one or more of the first three specified conditions, the company does not need to consider whether that individual would meet the fourth requirement. The fifth specified condition is only applicable where a trust or legal firm without legal personality appears within the chain of ownership.

What information is to be included in the PSC Register?

There is no specified format for the PSC Register. The PSC register is classed as a company record pursuant to the CA 2006 and can therefore be kept in hard copy or electronic form.

Rradar recommends:

• Investigating whether any individuals will be classed as Persons with Significant Control.

• Ensuring your company’s PSC Register is up-to-date with the correct information.

• Notifying any individuals with significant control and confirming their details.

• Looking through further guidance on the Department for Business, Innovation and Skills website and viewing the video by Companies House: https://www.gov.uk/government/news/keeping-your-people-with-significant-control-psc-register

How rradar can help:

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