What is a PSC? (Person with significant control)
Posted on 18th January 2022 at 10:31
The person who owns and controls the company is known as the person with significant control. It is a term used in the United Kingdom to identify the key people of the company. To be known as a Person with significant control or a PSC in a company one has to full fill certain criteria.
The criteria’s to fulfill to become a Person with significant control in a company are as follows-
Hold more than 25% share in the company
Has the right to participate in more than 25% of the surplus assets of the LLP
Hold more than 25% of the voting rights in a company or LLP
Has the right to appoint the majority of directors of the company or LLP
Has the right to remove the majority of directors of the company or LLP
Has the right to exert a significant influence or control over a company or LLP
Has significant control or influence over a trust or firm that meets any of the above criteria
There are a few exceptions to the points listed above which are as follows-
In point 1 and 2, if the shareholder is a nominee who is holding the shares on behalf of another person then the nominee is seen as transparent. This makes the nominee shareholder as an ultimate beneficial owner and not as a Person with significant control.
In point 3 and 4 it is mentioned that a person who has more than 50% of the voting rights can appoint or remove directors from the board, but there may be a governing document which could state that a specific person has the right to appoint the majority of the board.
In reference to the last two points, a person with significant influence or control if;
a.) They are involved in the management or direction of the company.
b.) If their recommendations are followed by shareholders who hold majority of the voting rights in the company.
Sometimes, a corporate entity may meet the criteria of being a Person with significant control if the corporate entity is registered in a district that has a central registry of PCS’s available to the public then you can submit that entity as a relevant registrable legal entity (RLE), essentially the corporate equivalent of the PSC, so that the public can access the public register and find out who the ultimate controllers of the company are.
What information is displayed on the PSC register?
If the PSC is individual, information such as their name, address, date of birth and nationality will have to be disclosed. If a PSC is a legal entity, then its name and address must be mentioned.
What if a company does not have or cannot identify any PSC?
If the company cannot identify or does not have the PSC then the directors must note this in the PSC register according to the specific situation.
Note: It is mandatory for every company and LLP in the UK to have a PSC register now.
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