The PSC regime part 1 – five steps to ensure compliance

20th October 2017

We frequently receive enquiries from new and existing clients about their obligations around the PSC, or Persons having Significant Control, Register.  Despite being introduced over a year ago, many small companies are failing to adhere to the rules.  Indeed, since December 2016, Companies House have identified hundreds of companies which are failing to take reasonable steps to comply and have sent numerous notices to companies in breach. In this blog we identity steps that must be taken by all companies to comply with the law regarding PSCs.  Put simply, a PSC is usually a shareholder who, directly or indirectly, holds a certain number of shares in a company, a certain percentage of the voting rights, the right to appoint or remove a majority of the board, or who otherwise exercises significant influence or control over the company.  There is a final category of PSC but we shall explore who is a PSC in detail in part 2. Below are five key steps to take to ensure compliance with the PSC regime: 1. All small businesses which are structured as a company are required to keep a register of PSCs. A criminal offence is committed by the company and directors of the company if it fails to do so. 2. That PSC Register must include the PSC’s full name, Date of Birth, nationality, service address and residential address (if different), when they became a PSC and the nature and extent of their control (using the official wording set out in the guidance published by the Government). 3. It must also record details of the reasonable steps taken by the company to identify PSC’s. For example, it may record that the company has checked its register of members, articles of association, any shareholders’ agreements, and reviewed shareholder voting patterns to ascertain the indemnity of the PSCs 4. Companies must ensure that the PSC register is kept available for inspection at the company’s registered office. A company may charge for providing third parties with copies of information on the PSC Register which is limited to £12.  A third party will need to have a “legitimate interest”. 5. The PSC Register will be publicly available at Companies House (except for the PSC’s residential address and day of birth) and should be updated if the company knows or reasonably might be expected to know that a change has occurred. Please get in contact if you have any questions regarding the law on PSCs and keeping a PSC Register.