What is a PSC
Fines for Companies for having no PSC registered.
We have seen an increase in the action taken by Companies House against companies that do not have their PSC information recorded on the registers. So we thought that we give you a brief overview of what the PSC is and what you may need to do to meet your obligations, but also the penalties.
What is a PSC?
PSC stands for Person of Significant Control, and is someone who owns or controls the company – they are also called beneficial owners.
When you incorporate a company you must tell companies house who your beneficial owners/PSC are, and also notify them about the nature of their control. In the past if you left this blank, companies house systems just put it down as no PSC registered.
However, they are starting to reject any incorporations that do not have the PSC’s or explicit statement that there is no PSC.
Why have a PSC register?
The EU and UK government have tried to increase the transparency of business ownership and try to reduce fraud and money laundering.
Over the years they have introduced PSC registers so that Companies House holds information on who exactly owns the businesses registered in the UK, previously you could use nominated shareholders or Directors that would mask who actually owns the company, with no requirement for their names to be on official documents.
PSC Nature of Control
The PSC must meet one or more conditions – these are known as the “nature of control”
- They will hold more than 25% of shares in the company
- Have more than 25% of voting rights
- Have the right to appoint or remove the majority of the board of directors
What information does a PSC need to provide?
Companies House will need to know the name, DOB, nationality, country of residence, correspondence address, home address, PSC date, when they were put on PSC register and what nature of controls apply.
For many small businesses, this is the same information that you need to provide when you are listed as a Director or Shareholder, the only difference is that you are also now listed as a PSC.
On our Formations website, during the application you can select to be a Director, Shareholder and PSC at the same time so you do not have to duplicate all the unnecessary form filling.
What happens if I do not provide the PSC details?
Companies House are now going through all the companies that have not provided PSC information.
Firstly, Companies House will contact Directors etc to ask them to ensure that the PSC registers are up to date. If they do not get a response and a failure to comply with notices requiring someone to provide the information it can led to a criminal prosecution and can result in a fine and or a prison sentence of up to 2 years.
This is not an idle threat and we have seen cases of companies being taken to court for not having a PSC or failing to comply. You must reply within one month of receipt of any notices.
You should also be informing companies house and updating the registers if there is a change of ownership, directors or shareholders
For many smaller 1 or 2 person director companies this is all straightforward and easy to establish.
This does get more complicated if there are people controlling or influencing the actions of the Directors and shareholders or if the PSC is a trust or firm. So more information can be found on the Companies House website
This brief article covers what a PSC is, why you should have your registers up to date and what are the repercussions if you don't..