What is a PSC?
PSC stands for Person with Significant Control. As the name suggests this is someone who has significant control over the running of a limited company. Normally this is anyone with more than a 25% shareholding. However it can also include investors or, where there is a corporate shareholder, the people who own that company. Since June 2016 all new limited companies have had to make a declaration of who their PSC are.
The official definition of a PSC is someone who:
- owns more than 25% of a company’s shares
- holds more than 25% of a company’s voting rights
- holds the right to appoint or remove the majority of directors
- has the right to, or actually exercises significant influence or control
- holds the right to exercise or actually exercises significant control over a trust or company that meets one of the first 4 conditions.
Why do you have to provide PSC details?
This new rule was introduced to try and stop the practice of nominee directors and shareholders where the ultimate ownership of the company was not transparent. This is where a person who is nothing to do with the day to day running of a company is appointed as a director or shareholder to hide who is really behind the company. This is a popular tactic for people involved in tax dodging, money laundering and fraud.
In most cases when setting up a limited company the PSCs will just be the shareholders that you are appointing. You are also required to keep a paper Register of your PSCs.