Since 30th June 2016 businesses planning to register a new limited company need to provide Companies House with information about the people who will have control over the company to be incorporated (People with Significant Control or PSCs).
So who is a PSC and how are they determined?
- anyone who holds more than 25% of the shares in the new company
- anyone holding more than 25% of the voting rights in the new company
- anyone who has the right to appoint or remove a majority of the new company’s board of directors
- anyone who has the right to exercise significant influence or control over the new limited company
My new limited company
As sole shareholder, Mr X has more than 25% of the shares. He is a PSC.
Another new limited company
Here, Mr. and Mrs. A hold all the shares in the company equally between them, so both are PSCs.
Yet another new limited company
However, in the example above, both X and Y hold more than 25% of the shares so both of them are PSCs. Z holds less than 25%, so is not a PSC (unless they meet any of the other conditions).
And another new limited company
It is possible for a new limited company to have no PSCs as in this example where no one holds more than 25% of the shares. In this case, the new company application should include a statement to this effect.
A person could still be a PSC even if they are not a shareholder of the company. For example, they have the absolute decision rights over the appointment and removal of the majority of the directors. Check your company’s constitution. Similarly, if someone has the absolute right to veto business decisions, regardless of their shareholding, they are a PSC. You might also find the Department of BIS guidance helpful in determining your PSCs.
Our company formations team is on hand to guide you through the company formation process and review the information you need to provide to form your new company.
Author: Karen Bowley
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