People of Significant Control Register
People of Significant Control Register also know as the PSC Register
Since 1st April 2016, it has been possible to see exactly who has a controlling stake in any company.The Small Business, Enterprise and Employment Act 2015 made it compulsory for companies to list the persons or organisations with a controlling stake in them. This data is found in a UK-wide register, known as the People of Significant Control (PSC) Register.
What is the PSC Register?
Essentially, the PSC Register is an extensive database listing all the individuals and entities with any control in a company, whether or not they are directors.
The following people or entities must be listed:
- Anyone with more than a 25% stake in the company’s shares
- Anyone with more than 25% of voting rights
- Those with the right to appoint and remove directors
- Those with the right to exercise actual or significant control over the company, or over a trust or company that has a controlling right
It applies to all companies other than publicly limited companies, and it is publicly available on the Companies House website.
The Purpose of the PSC Register
The PSC Register achieves four things:
- It supports the UK government’s intention to shed light on tax avoidance
- It helps reduce corporate corruption
- It encourages greater transparency, in line with G8 goals
- It furthers the UK’s ambition of becoming a world leader in data reform
Put simply, the PSC Register promotes transparency and full disclosure.
What the Data is Used for
Interested parties, from insurance providers to financial firms, can see who controls any given company. They can check:
- A company’s structure
- Leadership changes
- Significant investor names
- If a company has connections to interests that conflict or pose a problem for them
The PSC Register can also help UK companies when, for example, assets must be traced in order to resolve international disputes. More generally, the PSC Register reduces the risk of misunderstandings at the outset, because it makes it easier for companies and individuals to peek behind the veil and see exactly how a company operates before they choose to do business with them.
It’s unclear whether, going forward, people or entities will seek to reduce their interest in a company below the 25% threshold, but it is a significant step towards transparent business dealings.