What is the PSC Register?

17 OCTOBER 2024
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Understanding the PSC Register as defined Under Section 204(6) or 205(6)

A Notice under Section 204(6) or Section 205(6) of the Companies Act 2006 is an official notification issued when there is a change in the PSC register (Persons with Significant Control) or RLE register (Relevant Legal Entities) of a company. This ensures that individuals or entities who have significant influence or control over a company are kept informed of their updated status. Understanding what these registers are and their importance is essential for ensuring compliance with UK corporate regulations.

What is the PSC Register?

The PSC register records individuals who hold significant control or influence over a company. A Person with Significant Control (PSC) is someone who:

  • Holds more than 25% of the company’s shares.
  • Controls more than 25% of the company’s voting rights.
  • Can appoint or remove the majority of the board of directors.
  • Exercises significant influence or control over the company or its activities.
  • Controls a trust or firm that meets any of these conditions.

The PSC register must be maintained by every UK company and updated whenever there is a change in control. For example, when a new PSC is identified or when an individual ceases to have significant control, the company is required to issue a Notice under Section 204(6). This ensures that the individual is aware of their new status and any obligations that may arise from this change.

What is the RLE Register?

The RLE register records Relevant Legal Entities (RLEs) that have significant control over a company. An RLE is a legal entity, such as a company or a partnership, that:

  • Is itself subject to significant control reporting obligations.
  • Meets the same criteria as a PSC, such as holding over 25% of shares or voting rights, or having the power to appoint directors.

Like the PSC register, the RLE register must be updated when a new RLE is identified or when an RLE no longer holds significant control. In such cases, the company must issue a Notice under Section 205(6) to inform the RLE of the change in its status. This notice serves to ensure that the entity is aware of the update and can take any necessary legal actions.

Why Are PSC and RLE Registers Important?

The PSC and RLE registers play a crucial role in promoting transparency in company ownership. They help stakeholders understand who holds significant influence over a company, ensuring accountability and preventing opaque ownership structures that could mask undue influence or even illegal activity.

Non-compliance with maintaining an accurate PSC or RLE register can result in fines and legal penalties for both companies and the individuals or entities involved. The Notice under Section 204(6) and Section 205(6) ensures that changes are communicated to the relevant parties, keeping everyone informed and compliant with UK law.

What Information is Included in the Notice?

A Notice under Section 204(6) or Section 205(6) typically includes the following:

  • Date of Change: The effective date when the change in control occurred.
  • Details of Change: Information regarding the new or former PSC or RLE status.
  • Contact Information: Details of the company or legal entity responsible for maintaining the register.
  • Legal Obligations: Any actions that the individual or entity may need to take following the change.

Both PSCs and RLEs must comply with their legal duties when their control status changes. For PSCs, this might mean updating personal records or reporting changes to relevant authorities. For RLEs, the changes may require internal adjustments or notifications to associated companies.

Failure to comply with the obligations set out in the Companies Act 2006 can result in penalties, including fines and restrictions on corporate activity.

Why the Notice Matters for Stakeholders

The Notice under Section 204(6) or 205(6) is vital for ensuring all relevant parties are aware of who holds control within a company. By keeping the PSC and RLE registers up to date, companies ensure that there is a clear and transparent record of control and influence, which is essential for shareholders, creditors, and regulators.

Frequently Asked Questions

What is the PSC Register?

The PSC Register (Register of People with Significant Control) is a statutory register that UK companies, limited liability partnerships (LLPs), and certain eligible partnerships must maintain. Its purpose is to identify and record individuals or legal entities that have significant ownership or control over the company. This increases transparency about who really owns and controls UK businesses.

Who needs to keep a PSC Register?

Private companies limited by shares, private companies limited by guarantee, public limited companies, LLPs, and certain Scottish partnerships are typically required to keep a PSC register. There are some exemptions—for example, companies with shares admitted to trading on regulated markets may already have sufficient disclosure obligations.

What makes someone a Person with Significant Control (PSC)?

Someone is a PSC if they meet one or more of a set of legal conditions that show control or influence over the company. The common criteria include owning more than 25% of the shares, holding more than 25% of the voting rights, having the right to appoint or remove a majority of directors, or otherwise exercising significant influence or control. In some cases, control through trusts or other entities also counts.

What information must be included in the PSC Register?

The register must include details such as the PSC’s name, date of birth, nationality, country of residence, service address, date they became a PSC, when they were entered into the register, and which condition(s) of control they satisfy. Residential addresses are collected but not publicly visible in the central register, for privacy reasons.

What are the obligations and deadlines for updating and reporting PSC information?

If any PSC details change, a company must update its own PSC register within 14 days of becoming aware of the change, and notify Companies House within a further 14 days. New companies must provide a “statement of initial significant control” on incorporation. Failure to comply may lead to sanctions.

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