Persons with Significant Control

At Towerstone Accountants we provide specialist limited company accountancy services for directors and owner managed businesses across the UK. We created this webpage for people responsible for company filings and statutory records who want clear guidance on Companies House requirements without jargon. Our aim is to help you understand your obligations, avoid filing errors, and stay compliant with Companies House and HMRC.

Persons with Significant Control often shortened to PSC is one of the most misunderstood areas of company compliance in the UK. In my experience many directors only become aware of PSCs when they are filing a confirmation statement or when a bank asks awkward questions during an account review. By that point confusion has usually set in.

The PSC regime is not optional and it is not just for large or complex companies. It applies to almost every UK limited company including single director owner managed businesses. Getting it wrong can lead to penalties delays and increased scrutiny and yet getting it right is usually straightforward once the rules are understood.

In this article I want to explain clearly what a Person with Significant Control is why the PSC rules exist who counts as a PSC how the register works what must be filed with Companies House and the common mistakes I see time and again. This is written from a practical UK business perspective rather than a legal textbook approach.

What is a Person with Significant Control

A Person with Significant Control is an individual or sometimes a legal entity that has significant ownership or influence over a company.

The PSC rules are designed to identify who really controls a company rather than just who appears on the surface.

A PSC is someone who meets one or more specific conditions set out in UK company law.

Why the PSC rules exist

The PSC regime was introduced to increase transparency around company ownership and control.

Historically it was possible for companies to be owned or controlled behind layers of entities making it difficult to identify who was ultimately in charge. This created risks around fraud money laundering and misuse of corporate structures.

The PSC rules exist to

• Increase transparency
• Prevent misuse of companies
• Support anti money laundering efforts
• Make ownership clear to regulators banks and the public

The UK was one of the first countries to introduce a public PSC register.

Who the PSC rules apply to

The PSC rules apply to almost all UK limited companies.

This includes

• Trading companies
• Dormant companies
• Small owner managed companies
• Companies with one director

There are limited exceptions mainly for companies already subject to strict disclosure rules such as certain listed companies.

Most private limited companies must comply.

What counts as significant control

A person is generally a PSC if they meet any of the following conditions.

They

• Own more than 25 percent of the company’s shares
• Control more than 25 percent of the voting rights
• Have the right to appoint or remove the majority of directors
• Otherwise exercise significant influence or control over the company
• Exercise significant influence or control over a trust or firm that meets any of the above conditions

Meeting just one condition is enough.

Share ownership and PSCs

The most common PSC condition is share ownership.

If an individual owns more than 25 percent of the shares in a company they are a PSC.

This applies regardless of

• Whether they are a director
• Whether they are actively involved
• Whether the company is profitable

Ownership alone is sufficient.

Voting rights and control

Even if someone owns fewer shares they may still be a PSC if they control more than 25 percent of the voting rights.

This can happen where

• Different share classes exist
• Voting rights are weighted
• Agreements give enhanced voting power

This is why PSC analysis must look beyond simple share numbers.

Right to appoint or remove directors

A person may be a PSC if they have the right to appoint or remove a majority of the board.

This right may arise through

• The articles of association
• A shareholders’ agreement
• Contractual arrangements

Even if this power is never used it still counts.

Significant influence or control

This is the most misunderstood condition.

Significant influence or control is broader and more subjective. It captures situations where someone can direct company decisions even without formal ownership or voting power.

Examples may include

• A dominant individual whose wishes are always followed
• A lender who effectively controls decisions
• A founder who retains control through agreements
• A person with veto rights over key matters

Not every influence counts. It must be significant and ongoing.

PSCs and trusts or companies

Sometimes control is exercised through another entity.

For example

• Shares held by a trust
• Shares held by another company
• Complex group structures

In these cases the individual who ultimately controls that structure may still be a PSC.

This requires tracing control through the chain which is where professional advice is often needed.

PSCs in one person companies

In a one person company the situation is usually simple.

If you

• Own 100 percent of the shares
• Are the sole director

you are the PSC.

This still needs to be recorded even though it feels obvious.

Single director companies are not exempt.

What information must be recorded for a PSC

Companies must keep a PSC register as part of their statutory records.

For each PSC the register must include

• Full name
• Date of birth
• Nationality
• Country of residence
• Service address
• Usual residential address
• Date they became a PSC
• Nature of their control

Some information is publicly visible. Some is protected.

PSC register versus public register

The PSC register is kept by the company and some of the information is filed publicly.

The public register shows

• Name
• Month and year of birth
• Nationality
• Country of residence
• Nature of control

Residential addresses and full dates of birth are protected.

Where the PSC register is kept

The PSC register must be kept at

• The registered office
• Or a single alternative inspection location

It must be available for inspection and kept up to date.

Failing to maintain the register is a legal offence.

Filing PSC information with Companies House

PSC information must also be filed with Companies House.

This usually happens

• On incorporation
• When a PSC is identified
• When PSC details change
• When filing the confirmation statement

Changes must be reported promptly not just annually.

What happens if there is no PSC

In some companies no individual meets the PSC conditions.

This can happen where

• Ownership is widely dispersed
• No one has significant control

In these cases the company must state that there is no registrable PSC and explain why.

You cannot leave the register blank.

Duty to investigate PSCs

Companies have a legal duty to take reasonable steps to identify their PSCs.

This means

• Reviewing share ownership
• Reviewing voting rights
• Considering agreements and arrangements
• Asking relevant individuals

You cannot simply say you do not know.

Notices and PSC compliance

Companies may need to issue formal notices to individuals they believe may be PSCs.

Individuals are legally required to respond.

Failure to respond can lead to restrictions being placed on their shares.

Common PSC mistakes I see

Over the years certain errors appear again and again.

These include

• Assuming directors are always PSCs
• Forgetting PSCs when shares are transferred
• Ignoring PSC rules in family companies
• Not updating PSC details after changes
• Confusing shareholders with PSCs
• Leaving the PSC register incomplete

These mistakes often surface during funding bank reviews or due diligence.

PSCs and confirmation statements

The PSC register and the confirmation statement are closely linked.

Each year when filing the confirmation statement you must confirm that

• The PSC register is correct
• All PSC information is up to date

Confirming incorrect PSC information is a legal issue.

PSCs and banks accountants and advisers

Banks accountants and other advisers rely heavily on PSC information.

It is used for

• Anti money laundering checks
• Risk assessments
• Lending decisions
• Due diligence

Inconsistent PSC records often cause delays or refusals.

Penalties for failing to comply

Failing to comply with PSC requirements can lead to serious consequences.

These include

• Criminal offences for the company and officers
• Fines
• Restrictions on shares
• Increased scrutiny from regulators

While prosecutions are rare persistent non compliance is taken seriously.

PSCs and HMRC

PSC information is often reviewed alongside tax records.

Bodies such as HM Revenue and Customs may use PSC data to

• Understand control structures
• Assess risk
• Cross check information

Inconsistent information across filings raises questions.

PSCs in group structures

Group companies require careful PSC analysis.

Control may exist at

• Subsidiary level
• Parent company level
• Ultimate individual level

Each company in the group must consider its own PSC position even if ownership overlaps.

Changes in PSC status

PSC status can change over time.

Triggers include

• Share issues
• Share transfers
• Changes to voting rights
• New agreements
• Director appointments or removals

Changes must be reflected promptly.

How to keep PSC compliance simple

In practice PSC compliance is easiest when it is treated as part of routine governance.

Good habits include

• Reviewing PSC status when shares change
• Updating records immediately
• Aligning PSC review with confirmation statements
• Keeping clear documentation

Most problems arise from delay rather than complexity.

The role of professional advice

While many PSC situations are simple some are not.

Professional advice helps where

• Ownership is complex
• Trusts or corporate shareholders exist
• Control is informal
• Disputes arise

Getting advice early avoids misfiling and rework.

Final thoughts from experience

Persons with Significant Control is not just a compliance tick box. It is a fundamental part of how UK company law ensures transparency and accountability.

In my experience PSC issues cause problems not because directors are trying to hide anything but because the rules are misunderstood or overlooked. Small companies are not exempt and informal arrangements still count.

Once you understand that PSCs are about control rather than job titles the regime makes sense. With clear records and regular review compliance becomes routine rather than stressful.

Treat the PSC register as a living record not a one off filing. Done properly it supports good governance builds trust and avoids unnecessary risk later on.

You may also find our guidance on person with significant control vs director and companies act 2006 helpful when dealing with related Companies House tasks. For a broader overview of filings, registers, and statutory duties, you can visit our companies house hub.