In the last couple of years, we have seen an increase in banks and loan companies requiring information regarding the PSC of a Company. Banks and other lenders are looking closely at PSC information and finding that Companies House doesn’t always agree with the record of the shareholding, e.g. a shareholder who owns 75% of the shares is not showing as a PSC.
What is a Person of Significant Control (PSC)?
On 6 April 2016, a new law came into effect that requires all companies to keep a register of the people who can influence or control a company, that is, the PSC of the company. PSCs are popularly referred to in the press as the “beneficial owners” of a company.
A PSC is any person who owns or controls and company. A PSC can be an individual or a corporate entity. A PSC must meet at least one of the following conditions:
- Holds more than 25% of shares in the company.
- Holds more than 25% of voting rights in the company.
- The right to appoint or remove the majority of the board of directors.
It is also worth noting that your PSC might influence or control your company through other means. This could be directly, or on behalf of someone else. For example, someone may influence or control the actions of directors or shareholders.
We have often seen that any transfer of shares has been overlooked to update the PSC information or confusion with the percentage of the shareholding.
Why this information must be up to date
Companies House expects any changes to a PSC to be filed within 14 days of the change, to provide accurate information at Companies House and to ensure transparency of the company. This can also prevent money laundering and illegal activities.
What should you do?
We would urge all limited companies to ask their company secretarial provider to check the PSCs and nature of control, this will prevent issues when applying for loans and when or if they decide to sell the company.
It is easy to check if your details are correct, follow the link below:
https://www.gov.uk/government/organisations/companies-house
Type in the name of the company
Look for the people tab and within that tab, you can find the Persons with significant control.
Get in touch
If you would like to find out more about how we can support your business, get in touch with our team today or consider checking out our company secretarial service page for more information.