What is a person with significant control (PSC)?

A person with significant control (PSC) is an individual who owns a certain percentage of a company and/or has the power to control or influence particular aspects of a business. PSCs are sometimes called ‘beneficial owners‘, but this is not always the case. It’s usually easy to identify PSCs, but sometimes it’s not immediately evident.

Limited companies and some other types of business structures are legally required to determine who their PSCs are, record the details of each person in the firm’s PSC register, and ensure this information is filed and kept up to date at Companies House.

How to identify PSCs in a company

To be regarded as a PSC, a person must satisfy one or more of the following five conditions:

1. hold, directly or indirectly, more than 25% of the company’s shares
2. hold, directly or indirectly, more than 25% of the company’s voting rights
3. have the right, directly or indirectly, to appoint or remove the majority of the company’s directors
4. have the right or power to exercise influence or control over the company
5. have the right or power to exercise, directly or indirectly, a considerable degree of influence or control over the activities of a trust or firm that would otherwise satisfy one of the other four conditions if it was a legal person

The first three conditions are relatively simple to verify and normally require only checking the company’s register of members and articles of association. However, conditions 4 and 5 cover a broader range of scenarios, so it can be more challenging to identify individuals to whom these criteria apply.

Understanding the confirmation statement and PSC register Can I hide the identity of a company shareholder? How to register a PSC for a company

What does ‘significant influence or control’ mean?

In the context of PSCs, the term ‘significant influence or control’ refers to the type of power that a person has over a company’s activities.

• ‘Control’ – the person has the authority and power to direct the activities of the business
• ‘Significant influence’ – the person can ensure the business generally adopts the activities they desire

Significant influence and control can manifest in a variety of ways. Examples include:

• A person has absolute rights to make decisions on the running of the business. For example, relating to:
  • adopting or altering the company’s business plan 
  • changing the nature of the company’s business activities 
  • obtaining additional borrowing from lenders 
  • appointing or removing the CEO 
  • establishing or altering any profit-sharing, bonus, or other incentive schemes of any nature for the company’s directors or employees 
• A person has absolute veto rights over:
  • any decisions related to the running of the business 
  • the appointment of the majority of directors who hold the majority of the voting rights at board meetings

Further examples include:

• A person significantly involved in the management and direction of the company. For example, a person who is not a director but who consistently or regularly directs or influences a significant number of directors.
• A person whose recommendations are always, or almost always, followed by shareholders with majority voting rights when they are deciding how to vote. For example, a company’s founding member no longer holds a significant percentage of shares or voting rights, but their recommendations to other shareholders are always, or almost always, followed.

Exemptions from ‘significant influence or control’

A person may hold a right that constitutes significant influence or control without actively exercising that right. Conversely, a person may have the power to influence the decisions of the directors or shareholders without holding any official right. In both cases, the individual would typically be classified as a PSC under the fourth condition mentioned earlier in the article and should be registered accordingly.

Companies House released guidance to clarify the roles that, on their own, do not meet the fourth condition. These exemptions include:

• Professionals providing advice or direction to the company – such as lawyers, accountants, financial advisors, auditors, investment managers, and management consultants, who influence business decisions but do not control them.
• Third-party contractual relationships – including suppliers, clients/customers, and lenders, who interact with the company commercially but do not exercise control over business operations.
• Regulators, liquidators, and receivers – those who act in an official capacity under legal enactments rather than as company controllers.
• Employees and company officers – such as directors, company secretaries, and CEOs of firms who act during their employment or appointment.
• One-time shareholder recommendations – individuals who make occasional voting recommendations but do not exert ongoing control over shareholders’ decisions.

These exemptions recognise that influence alone doesn’t always equate to control and ensure professional and regulatory roles aren’t mistakenly classed as PSCs.

Who can be entered onto a PSC register?

Although a PSC is by its nature a natural person, it is sometimes possible for a company to be entered onto the PSC register. Companies that can be entered onto a PSC register are called a Relevant Legal Entity (RLE). To qualify as an RLE, a company must:

1. Be required to keep its own PSC register; or
2. Have voting rights admitted to a regulated market in the EEA, USA, Israel, Japan or Switzerland.

This means it is possible for a whole range of people to be added to a PSC register, including:

• individual people of any nationality
• limited and unlimited companies, limited partnerships, and limited liability partnerships (LLPs)
• charities and non-profit organisations
• local authorities and government bodies
• international organisations

PSC legislation does not impose a minimum age requirement for a person with significant control.

Can a disqualified director be registered as a PSC?

Disqualified directors are prohibited from forming or running a company. They also cannot instruct a third party to form or run a company on their behalf and under their direction.

However, they may be allowed to own shares in a company, resulting in a grey area of the law regarding disqualified directors being PSCs in a company.

Unless the court has granted permission to act in such capacity, disqualified directors who own more than 25% of the shares in a company and/or meet any of the other qualifying conditions of a PSC should exercise extreme caution to avoid breaching the terms of their disqualification order.

Which types of companies have PSCs?

The following types of companies must identify any person with significant control and record their details in a PSC register:

• Private companies limited by shares
• Private companies limited by guarantee
• Some public companies limited by shares
• Limited liability partnerships (LLPs)
• Scottish limited partnerships (ESPs)
• General Scottish partnerships (only where all the partners are corporate bodies)
• Unlimited companies
• Societates Europaeae (SEs)
• Community interest companies (CICs), whether registered as limited by shares or limited by guarantee

Companies, SEs, and LLPs are required to keep their own PSC register. Eligible Scottish partnerships (ESPs and general Scottish partnerships with solely corporate partners) do not have to keep a PSC register. However, they must deliver PSC information to Companies House to be disclosed on the central register of companies.

You can find further information on PSC requirements in the PSC guidance from GOV.UK and following legislation:

• Companies Act 2006
• The Register of People with Significant Control Regulations 2016
• Limited Liability Partnership (Register of People with Significant Control) Regulations 2016

Registering a person with significant control in a company

After identifying a PSC or multiple PSCs, their details must be recorded in the company’s statutory PSC register within 14 days of them becoming one.

This information must also be sent to Companies House, where it is recorded and disclosed on the central register of companies, which is available to the public online. This should be carried out within an additional 14 days of their entry onto the PSC register (in other words, within a maximum of 28 days of them becoming a PSC).

Any changes to the company’s PSCs should be immediately updated on the statutory PSC register and reported to Companies House. As a limited company director, it is your responsibility to ensure the PSC register is maintained and the relevant information delivered to Companies House. Failing to keep appropriate, accurate records or failing to provide this information to Companies House could lead to a fine or even imprisonment.

What if my company doesn’t have a person with significant control?

If your company does not have a PSC, you must state this in the PSC register. If you are unsure whether your company has a PSC, or cannot identify your PSC, you should contact Companies House.

What information about an individual PSC should be entered into the PSC register?

The PSC register must include the PSC’s full name, date of birth, nationality, service address, home address (not disclosed publicly), country of residence, and the nature of their control over the company. You must also provide the date they became a PSC of the company and the date you entered them into your PSC register.

RLEs must provide their name, registration number, registered office address, legal form, the governing law they’re incorporated under, and where they are registered.

Stay compliant and keep your PSC register up to date

Understanding and correctly registering every person with significant control is essential for compliance and company transparency. By keeping your records accurate and updated, you can avoid potential penalties.

For businesses looking to simplify compliance, our Full Company Secretary Service provides expert support, including up to 15 company changes per year, the preparation and filing of your annual Confirmation Statement, monthly legal guidance notes, and a dedicated account manager to maintain your company registers (including your register of people with significant control).

Explore our blog for more insights on company compliance, and leave a comment with any questions or thoughts.