As you start your business in the UK, there will be a number of business structures you can choose from. You can choose a sole trader business structure where you run the business on your own and you keep all the profits, although simple this option leaves your house and other personal assets vulnerable if the business gets into debt. Many clients also refuse to work with contractors who are sole traders. There is also the option of going for a limited company where directors run the affairs of the business and shareholders can take a back seat, although typically for a contractor there will be only one shareholder who is also the only director – you. The third option is the partnership one. Here you can partner with one or two people to start and run a business.
If you decide to choose a partnership or a limited company, it’s inevitable that there will be people who have significant control in terms of shareholding and management. Someone in this position is called a Person with Significant Control (PSC) and the UK government has put in place various guidelines for them.
Registration of PSCs
All UK companies are mandated by law to identify and register the people who own or control their companies, these are the PSCs. All this information must be filed with the central public register at Companies House. The registers are designed to enhance transparency as to who owns or controls companies in the UK.
Company Oblations for PSCs
There are a number of things companies must do in order to comply with the guidelines set for PSCs.
Here is a breakdown of what you must do:
- The PSC must first be identified through existing company records. Their information must also be verified at this stage.
- Once the PSCs have been identified, their information must be recorded within 14 days. Each company must have its own PSC register where this information will be recorded.
- Once the company’s PSCs register has been filed, the same information should be submitted to Companies House within 14 days.
- Companies are also mandated to update information on their register and file these updates at Companies House. All changes in the information recorded must be updated within 14 days.
- Once information is filed at Companies House, it’s the job of all companies to confirm that whatever has been filed is actually accurate.
Who is a PSC?
- Someone who owns more than 25% of all shares in a company
- Someone who has more than 25% of the voting rights
- Someone who can appoint or remove directors in a company
- Anyone who has significant influence in a company, a trust or a partnership
These are some of the common PSC requirements for UK companies but there is a full guide from Companies House that you can read online to get a better understanding.