When is a legal entity relevant and registrable?

A relevant legal entity (RLE) is a company or organisation that has a significant degree of influence or control over another company. RLEs are the same as people with significant control (PSCs), but they are corporate entities rather than individual people.

In this post, we explain when a legal entity is relevant and registrable in relation to a company, the information you need to include on the PSC register, and how to update RLE details at Companies House.

What qualifies as a relevant legal entity?

A relevant legal entity (RLE) is a corporate body that owns or controls a UK company, limited liability partnership (LLP), UK Societas (previously known as Societates Europaea), or an eligible Scottish partnership (ESP).

If an RLE was an individual person rather than a corporate entity, it would be classed as a person with significant control (PSC). Therefore, in the simplest of terms, a relevant legal entity is a corporate PSC.

The only exceptions to this are where companies are owned or controlled by ‘other registrable persons’, such as:

• a local or national government or government department
• an international organisation, whose members include two or more countries, territories, or their governments, or
• a corporation sole (a legal entity that consists of a single incorporated office that is occupied by a single person)

These other registrable persons don’t meet the required conditions to be classed as relevant legal entities. However, they are treated as PSCs and their details must still be recorded on the PSC register.

People with significant control (PSCs) – who are they and what do they do?

RLEs are subject to the same PSC regime conditions as individual people. This means that a legal entity is deemed relevant in relation to a company if it meets one or more of the following conditions:

1. directly or indirectly holds more than 25% of the shares
2. directly or indirectly holds more than 25% of the voting rights
3. directly or indirectly holds the right to appoint or remove the majority of directors
4. otherwise has the right to exercise, or actually exercises, significant influence or control
5. has the right to exercise, or actually exercises, significant influence or control over the activities of a trust or firm that is not a legal entity, but would itself satisfy any of the first four conditions if it were an individual

To be relevant in relation to the company, the legal entity must also:

• keep its own PSC register, or be an ESP and provide information on its PSCs to the central PSC register at Companies House; or
• have voting shares admitted to trading on a regulated market in the UK or European Economic Area (other than the UK) or on specified markets in Switzerland, the USA, Japan, or Israel

When a relevant legal entity is the first RLE in a company’s ownership chain, it is registrable in relation to that company. As such, the company must only enter the registrable RLE’s details in the register of people with significant control (PSC register).

For example:

• Company C owns 100% of the shares in Company B
• Company B owns 26% of the shares in your firm, Company A
• Both Company C and Company B are relevant legal entities in relation to your firm
• Only Company B is a registrable RLE in relation to your firm because it is the first RLE in the ownership chain

GOV.UK’s guidance on PSC requirements provides detailed examples explaining when relevant legal entities are registrable in relation to a company.

Entering RLE information on the PSC register

If your company, LLP, or UK Societas is owned or controlled by any relevant legal entities, you must enter certain information about the registrable RLEs on the PSC register. The following details are required:

• name of the relevant legal entity
• address of its registered office or principal office
• legal form of the entity (e.g. limited company, LLP, etc) and the law by which it is governed
• the register in which it appears (including details of the country or state) and its registration number, if applicable
• date that it became a registrable RLE in relation to the company
• which of the five PSC conditions are met, including quantification of the interest in the company, where relevant (e.g. holds more than 25% of the shares)

You must enter this information in your company’s own PSC register within 14 days of identifying the registrable RLEs. This register should be made accessible to anyone who requests to view it for a proper purpose.

Your company’s PSC register should be kept at your company’s registered office or a SAIL address (Single Alternative Inspection Location), alongside your other statutory company registers.

There is no requirement for eligible Scottish partnerships to keep their own statutory PSC register. However, they must still provide information on PSCs and registrable RLEs to Companies House.

Providing details of a registrable RLE to Companies House

In addition to recording a registrable RLE’s details in your company’s own PSC register, you must send the same information to Companies House on form PSC02 ‘Notice of relevant legal entity (RLE) with significant control’.

This should be done no later than 14 days after entering the RLE’s details on your PSC register. Companies House will then add this information to the public register of companies, usually within 48 hours.

How to register a PSC for a company

You can deliver the form online via Companies House WebFiling service or Quality Company Formations’ free Client Portal. Alternatively, you can print the form and send it by post.

You do not have to confirm this information before sending it to Companies House. The requirement to confirm only applies to the details of individual PSCs.

Other registrable persons on the PSC register

If an ‘other registrable person’ (ORP) owns or controls your company, you must enter their details on the PSC register. The information required is as follows:

• name of the other registrable person
• address of their principal office
• legal form of the entity and the law by which it’s governed
• the date on which it became registrable in relation to the company
• which of the five PSC conditions are met for having significant control

Again, there is no legal requirement for the company to verify this information before entering it on the PSC register.

The difference between a PSC and a relevant legal entity

The difference between a PSC and a relevant legal entity is that a PSC is an individual person (a human), whereas an RLE is a corporate body (e.g. a company or an LLP).

The reason that RLEs are not known as PSCs is because, by definition, a PSC is an individual, not a legal entity like a company or limited liability partnership.

Information on all PSCs in relation to a company must be recorded on the PSC register. However, only registrable RLEs can be entered on the PSC register – that is, the first RLE in a company’s ownership chain.

Updating RLE information on the PSC register

You must ensure that all information in your company’s PSC register and the public register at Companies House is kept up to date.

If you become aware of any change of details relating to a registrable relevant legal entity or other registrable person, you must enter the new information in your PSC register within 14 days.

No later than 14 days after doing so, you must then provide the same updated information to Companies House on one of the following forms:

• form PSC05 ‘Give notice of change of details for relevant legal entity with significant control’; or,
• form PSC06 ‘Give notice of change of details of other registrable person with significant control’

If a legal entity or ORP ceases to be relevant and registrable in relation to your company, you must notify Companies House on form PSC07 ‘Notice of ceasing to be an individual person with significant control (PSC), relevant legal entity (RLE), or other registrable person (ORP)’.

The following details must be entered on the form:

• your company name and registration number
• name of the RLE or ORP as it appears on the Companies House register
• the date on which the legal entity ceased to be an RLE or ORP in relation to your company
• the date on which you updated this information on your company’s PSC register

You can file all of these PSC forms online via Companies House WebFiling service or Quality Company Formations’ free Client Portal. Alternatively, you can print the required form and send it by post.

Once the information has been received and processed, Companies House will update the public register within approximately 48 hours.

Requirement to check and confirm RLE information each year

At least once every 12 months, you must send a confirmation statement to Companies House verifying that the information they hold on your company is correct and up to date. This includes details of PSCs and registrable relevant legal entities on the PSC register.

How to file a confirmation statement

If the information is up to date, you will confirm this by filing the confirmation statement. However, if any details are incorrect, you must update the information on the relevant Companies House form, either before or at the same time as sending the confirmation statement.

Thanks for reading

We hope that this post has helped you to understand when a legal entity is relevant and registrable in relation to a company, how an RLE differs from a PSC, and which information you need to include on the PSC register.

If you have any questions about relevant legal entities or the PSC register, please comment below and we’ll be happy to help.