From today – 26th June 2017 – the way PSC notification works is changing. All limited companies will now have to update their PSC register, and Companies House, whenever there is a change rather than just doing it at the end of the year. When a change to PSC is made limited companies will have to update their own PSC registers within 14 days, and then notify Companies House within another 14 days (so 28 days total).
What Exactly has changed?
When then PSC rules were introduced in April 2016 it was a requirement for all limited companies to hold a paper register of who their Person(s) with Significant Control (PSC) were. In June 2016 it became a requirement for any new companies to declare their PSC when a company formation was being done. Also in June 2016 it became a requirement for existing limited companies to notify Companies House of any changes to PSCs when they filed their annual confirmation statement.
The new rules mean that limited companies will now have to update their own PSC registers, and update Companies House, as changes are made. This will mean that the government always has an up to date record of who is controlling a company, rather than potentially having information which is 10 or 11 months out of date.
What is a PSC?
PSC stands for Person with Significant Control. A PSC is defined as anyone who meets any of the following criteria:
- holds more than 25% of a company’s shares
- holds more than 25% of a company’s voting rights
- has the right to appoint or remove the majority of directors
- has the right to, or exercises, significant influence or control over the running of the company
- has the right to exercise or actually exercises significant control over a trust or company that meets one of the first 4 conditions (where one company owns shares in another).
The PSC rules were introduced to try and stop people from hiding their involvement in limited companies. There have been problems in the past with people using companies with nominee directors to commit fraud, tax evasion and money laundering. With the PSC rules the people behind a company should now be listed with the government regardless of whether they are using nominee directors.
The most common reason people are going to need to do a PSC notification to Companies House will be changes to the shareholding of a company. Adding or removing a shareholder with more than 25% of the company shares will be a notifiable event in most cases. The other most likely scenario where a PSC notification would be needed for a startup or small business would be taking on an investment.
How can Companies House be updated?
If The Company Warehouse are making changes to your business structure that impact on the PSC then we will update Companies House for you and update your PSC registers as well. We do this online using our access as electronic filing agents with Companies House.
If you want to notify Companies House of changes yourself then you can do it using your own WebFiling account. If you don’t have access to WebFiling then it can be done on paper using the 9 paper forms numbered PSC01 to PSC09.
If you have questions about doing a PSC notification, or are unsure how to make changes to your limited company, give our business consultants a call on 0800 0828 727.