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      A Simple Guide to Understanding PSCs (Persons with Significant Control)

      Who they are, why they matter, and what your responsibilities are

      You might have noticed the acronym 'PSC' on your Companies House page or in the ‘People & communication’ section of the Vestd platform. But what exactly does PSC mean, and why is it important?

       

      Dive into our guide to uncover what PSC means, why it’s crucial for your business, and how to keep your company compliant with PSC requirements. Let’s make sense of it together!🙌🏼

      Contents📋

       

      What Is a PSC?

      PSC stands for Person with Significant Control. This refers to someone (an individual or company) who has significant influence over a business. A PSC can be defined as someone who:

      • Owns more than 25% of a company’s equity
      • Controls more than 25% of a company’s voting rights
      • Has the right to appoint or remove a majority of the company’s directors
      • Exercises, or has the right to exercise, significant control over the company

      In simple terms, a PSC is someone who owns or controls your company, giving them beneficial ownership. Companies House has a great guide on how to identify and record the people who own or control your company. 

       

      Meaning of Significant Control and influence 

      • Only applicable if the PSC does not already have the right to appoint and remove directors 
      • The person has significant influence or control over the company 
      • The person has control over a firm and members of that firm have significant influence or control over the company 
      • The person has control over a trust and the trustees of that trust have significant influence or control over the company. 

      What Are a Company’s Responsibilities Regarding PSCs?

      As a company, you need to:

      1. Identify your PSC(s) and confirm their information.
      2. Record the PSC’s details in the company’s PSC Register within 14 days.
      3. Submit this information to Companies House within a further 14 days.
      4. Update your PSC Register if any information changes, and inform Companies House within 14 days.
      5. Confirm the accuracy of PSC information to Companies House annually through a confirmation statement (CS01).

       

      📄Why Is a PSC Register Important?

      A PSC Register increases transparency, helping investors understand who controls a company and supporting law enforcement in tackling money laundering.

       

      Information Needed for the PSC Register

      Before adding a PSC to the register, you must confirm the following details with them:

      • Name
      • Date of Birth
      • Nationality
      • Country or region of residence
      • Service and residential address
      • Date they became a PSC for the company
      • The conditions under which they qualify as a PSC (e.g., share ownership levels)
      • Whether they’ve requested their information to be protected from public disclosure

      What If You Don’t Know Who Your PSCs Are?

      It's essential to identify your PSCs (Persons with Significant Control) accurately.

      Not only does this ensure your company remains compliant with legal requirements, but it also upholds transparency and trust with stakeholders.

      🚨Neglecting to identify PSCs can lead to significant legal consequences as it is a criminal offence.

      For all the details you need, check out HMRC’s fantastic guide on PSCs. It’s a valuable resource to help you stay on top of your responsibilities!

       

      💡Quick Reminder: What Makes Someone a PSC?

      • More than 25% equity ownership
      • More than 25% voting control
      • The right to appoint or remove a majority of directors
      • Significant control or influence

      Most PSCs fall into the first three categories. Your PSC Register should never be blank—if your company doesn’t have a PSC, you must still confirm this with Companies House.

       

      Examples of PSC Scenarios

      1. Company A Ltd:
        • Sam holds 75% of the shares.
        • Charlie holds 25% of the shares.
        • Sam and Charlie are both PSCs as they meet the ownership criteria.
      2. Company A Ltd:
        • Sam holds 75% of the shares.
        • Charlie holds 25% of the shares.
        • Georgie has 0% shares but controls a trust with veto power over the company’s business plan.
        • Sam, Charlie, and Georgie are all PSCs due to their respective levels of control.

       

      PSCs and Legal Entities

      While a PSC is usually an individual, a legal entity (like another company) can also be considered a PSC if it meets the relevant criteria. For instance, a legal entity is listed as a PSC if it keeps its own PSC register or is publicly traded on certain markets.

      A legal entity must be added to the PSC register if it is both relevant, and registrable in relation to the company. 

      A legal entity is relevant if it meets conditions above, and: 

      • keeps its own PSC register; or 
      • has voting shares admitted to trading on a regulated market. 

      A relevant legal entity (RLE) is registrable in relation to the company if it is the first RLE in the company's ownership chain.

       

      🌍Overseas Entities

      An overseas company can only be a Relevant Legal Entity (RLE) if it’s listed on certain markets. If it’s not listed, you’ll need to look further up the ownership chain to identify any individual or entity indirectly holding a “majority stake” in that overseas company.

       

      Additional Considerations

      • Indirect vs. Direct Control: Conditions may be met directly or through another company.
      • Joint Rights: Agreements to jointly vote or exercise rights can make multiple parties PSCs if combined, they exceed 25% control.
      • Parent Companies: Different rules apply if your company is controlled by another entity.

       

      PSCs on the Vestd Platform

      On Vestd, you can:

      • Maintain your PSC Register
      • Add or remove a PSC
      • Recalculate PSCs

      When to Opt Out of PSC Management

      • If making changes off-platform
      • If there’s an overseas RLE involved

       

      ✅Correcting PSC Records

      If you discover an error and need to update a PSC record, it’s important to act quickly to ensure your company’s records are accurate and compliant.

      To make these corrections, you’ll need to complete and submit an RP04 form to Companies House.

      The RP04 form will be used to correct the details of a PSC on the public register. This form allows you to provide the correct information and ensure that your PSC register accurately reflects any changes in control or ownership.


      Why It’s Important:

      • Compliance: Accurate PSC records are a legal requirement. Keeping your PSC information up to date helps you comply with regulations and avoid potential penalties.
      • Transparency: Correct records ensure transparency for investors, stakeholders, and regulatory bodies, fostering trust and clarity about who controls your company.
      • Avoiding Penalties: Failing to update or correct PSC information can lead to legal consequences, including fines. Filing the RP04 form promptly helps you stay in good standing.

       

      And don’t forget, if you need any assistance, our dedicated Customer Success team is always here to help👋🏼 Just drop us an email at support@vestd.com—we’re here to make your experience smooth and hassle-free!