A PSC Register is a new statutory register which all companies in the UK are required to maintain, including charitable companies. The PSC register must list those individuals who exercise significant control over the company, as well as any “relevant legal entities” (RLEs) which have significant control over the company.
Who is a “Person with Significant Control”?
Only individuals can be “Persons with Significant Control”. If a company is controlled by another company (such as a wholly owned trading subsidiary), the owning company will usually be listed on the Register as a “relevant legal entity” (RLE). There are five tests which must be considered to decide whether an individual exercises “significant control” of a company: a person is considered to have “significant control” if they meet any one of the following conditions:
- They directly or indirectly hold more than 25% of the shares (companies limited by shares only);
- They directly or indirectly hold more than 25% of the member voting rights (where shares or voting rights are held jointly (e.g. trustees of trusts will hold shares jointly) each joint owner is treated as if they hold the total shares or voting rights);
- They directly or indirectly hold the right to appoint or remove a majority of directors;
- They otherwise have the right to exercise, or they actually exercise, significant influence or control over the company;
- They have the right to exercise, or they actually exercise, significant influence or control over the activities of a trust or firm which is not a legal entity, but would itself satisfy any of the first four conditions if it was an individual.
Whilst applying the first three tests will generally be relatively straightforward, the fourth and fifth tests are harder to apply as they include a subjective element, considered in light of the workings of the company “in the round”. BIS has produced Statutory Guidance on the meaning of "Significant Influence or Control”, which provides guidance on how to assess whether a person has significant influence or control. Company specific advice should be taken in order to ascertain whether a person exercising “significant influence or control” is required to be listed on the PSC Register.
Do independent schools need to maintain a PSC Register?
Independent schools which are incorporated as a charitable company limited by guarantee (“CLG”), or which have a related charity which is a CLG or a trading subsidiary as part of their structure, must maintain a PSC Register.
A PSC Register must never be left blank and must contain one of the prescribed statements. The information on the OSC Register will also need to be submitted to Companies House as part of the Confirmation Statement (the filing which has replaced the Annual Return).
It is important for all companies to create and maintain PSC Registers as failure to do so is a criminal offence by the company and its directors. If any charitable company would like any assistance in creating, completing or maintaining PSC Registers, please contact Eva Abeles or Samantha Pritchard.
In addition, a variety of resources, including guidance, on the subject of the PSC Register have been prepared by our Corporate team. These resources can be accessed here.