Every private company in England and Wales must keep a register of ‘people with significant control’ (PSC) and ensure it is up to date. Despite this being a legal requirement for companies and LLPs, over 40% of companies do not check their PSC register to ensure it is still correct after the company is set up, according to Government data.
Whether you have one shareholder or ten, your PSC register cannot be ignored. You must note everyone within your company who:-
- Holds more than 25% of the company’s shares;
- Holds more than 25% of the company’s voting power;
- Holds the right to appoint or remove the majority of directors; or/and
- Has the right to exercise, or actually exercises, significant influence or control of the company.
If none of the above apply to your company (for example you have 5 equal shareholders of 20% each) then you must make a statement on your PSC register stating that you believe there are no PSCs in relation to your company.
Not only must you ensure that the right people are listed, you must also make sure that all of their details are correct, including their address, date of birth and the nature of their control.
Failure to comply with these rules is a criminal offence, which carries criminal sanctions of anything from a fine to 2 years imprisonment for more serious breaches.
Check your PSC Register regularly for inaccuracies, and ensure that any changes are noted at Companies House within 14 days. It is easy to ignore or forget about the PSC Register, but the sanctions for not managing it correctly can be just as severe as failing to file company accounts.
If you require any advice to ensure you are compliant then please contact the Hewitts commercial team on 01388 604691 or email firstname.lastname@example.org