The People with Significant Control register
What You Need To Know
The Companies House register of People with Significant Control (PSC) is used by law enforcement agencies and financial regulators as a financial investigation tool. However, a survey has concluded that it isn’t as effective as it could be. In today’s blog, we look at what it is and whether you have anything to fear.
People with Significant Control - who are they?
If you are someone who holds more than 25% of shares or voting rights in a company, then you are a Person of Significant Control (PSC). As such, you often exercise significant influence or control over a company. You usually have the right to appoint or remove the majority of the board of directors. You will very often be the owner of a company, its Chief Executive or a major shareholder.
From 2016, companies, by law, have had to register its Persons of Significant Control. The information you must register includes your name, date of birth, nationality, and details of your interest in the company. The registration of these details happens when your company issues its annual confirmation statement to Companies House.
The register is free for the public to access. Law enforcement agencies and financial regulators make use of it as a tool for their investigations.
What do users think of the Register?
Recently, the government Department for Business, Energy and Industrial Strategy (BEIS) commissioned a survey of 500 businesses. They also carried out in-depth interviews with 30 organisations and two members of staff from Companies House.
In answer to the survey, most organisations who use the register reported favourably – it helped simplify the process of obtaining information about company ownership.
However, some of the law enforcement and financial bodies argued that the information published was unreliable. The chief cause seems to be the lack of checks on the data submitted. A simple suggestion to improve the validity of information would be to apply a unique ID for each PSC. Then, it would be easy to quickly cross-reference all the companies for which that person was listed as a PSC for.
Summary of survey results
The survey found that 92% of businesses had PSCs.
– 43% had just one
– 37% had two
– 13% had three or more
The two most common reasons for businesses declaring no PSCs were
Size – Larger companies were most likely to list no one on their register
Complexity – Businesses with complex ownership structures seem more likely to have no PSCs.
There are 4.88m PSCs on the register.
3.84m companies on the register have at least one PSC.
The average number of PSCs per company is 1.29.
The median overall cost to business of their first submission to the PSC register was £125. This cost varies according to the size and complexity of the ownership structure.
The median cost of maintaining the data was just £2 per year.
95% of businesses surveyed said the process of collecting and preparing the data had no impact on business operations.
22% of businesses surveyed used the PSC to find out information about other businesses. They generally found the information to be useful.
64% of survey respondents used it to research clients and customers. 93% of them found the register useful or very useful.
All law enforcement organisations surveyed said they had used the PSC register for criminal investigations. Most used it at least once a week. Financial institutions also use the register, mostly to identify PSCs of corporate clients.
Investment associations and business organisations declared that they had little cause to use the PSC register, but said they were aware of its use by members.
Applying for exemption
Not every PSC is forced to declare themselves on the PSC register. If, for example, you believe that your involvement with a company might put you at risk of violence or intimidation, you can apply to be exempt from compulsory registration. In nearly three years since the establishment of the register, 903 applications for suppression were received by Companies House. 52% were approved, 18% denied, with most of the remainder awaiting a decision.
Is there anything to fear from the PSC register?
Do you have something to hide? Then maybe. If you don’t want others to know of any controlling interest you might have in a company, then your status will be much harder to conceal than used to be the case. But for the large majority, the transparency that the PSC register delivers will only be of benefit. If, for example, you need to know about the controlling influence behind another company, the information you need is in the public domain.
Here to help
The PSC register was set up by Companies House to provide clarity and transparency. If you’re unsure as to which individuals your company should submit to the register, get in touch. We know and understand the regulations and, wherever there’s doubt, we’re here to help.
Call us on – 020 3008 7820