As of 26 July 2017, it has been a legal requirement that limited companies and limited liability partnerships maintain a Person with Significant Control Register (PSC Register) so why is it, after all this time, when I look up a company at Companies House the information contained within the PSC Register is often incomplete or inaccurate?

The law states that a company must take reasonable steps to find out if it has any registrable Persons with Significant Control or any Relevant Legal Entities (PSCs); and, if it does, identify them.

A failure by the company to follow this simple two step test is a criminal offence for which the company and its officers) can be prosecuted.

Given the relative simplicity of the test, and the criminal sanctions, now would be a good time for companies to review their PSC Register and ensure that they are up to date and accurate.

What is required:

When identifying PSCs there are 5 broad headings to consider, does an individual or entity:

1. hold more than 25% of the shares in the company?
2. hold more than 25% of the voting rights in the company?
3. hold the right, directly or indirectly, to appoint or remove a majority of the board of directors of the company?
4. have the right to exercise, or actually exercises, significant influence or control over the company?
5. control a trust or other firm without legal personality which meets one of the above criteria in respect of the company?

If any of the above applies, or the position changes, perhaps due to a sale or transfer of shares, the PSC Register should be updated and the individual or entity’s details added,  removed or adjusted as appropriate and Companies House updated using the prescribed statements.

I understand that there can, at times, be uncertainty, particularly if a company has different classes of shares or some shares are being held on trust. If this is the case, or you have any other queries relating to your company’s PSC Register, please contact me.