What is a Person of Significant Control?

When forming a company or submitting a Confirmation Statement you have to provide details of any Person of Significant Control (PSC) over the company.

Following changes that were implemented on 30 June 2016 all companies now have to declare who has control over the company. The intention is to provide greater transparency for UK companies and to prevent the controlling parties from hiding their details.

A PSC is an individual who meets one or more of the following conditions in relation to a company:

• Directly or indirectly owns more than 25% of the shares
• Directly or indirectly holding more than 25% of the voting rights
• Directly or indirectly holding the right to appoint or remove the majority of directors
• Otherwise having the right to exercise, or actually exercising, significant influence or control
• Holding the right to exercise, or actually exercising, significant influence or control over the activities of a trust or firm which is not a legal entity, but would itself satisfy any of the first four conditions if it were an individual.

What does this mean to most people forming companies?

In general, most companies are formed with simple share structures. They are normally registered with just one or two shareholders that control the company and these shareholders are deemed to be PSCs. If you register a new company and the shareholders own 25% of the shares or more then they will be all PSCs.

When you make another company a shareholder of the newly incorporated company then it gets a little more complicated. At this point the PSC is normally the people that control the corporate entity that is to hold the shares.

 

If you would like more information on PSCs you can read more on our blog.