Alex is Sprintlaw’s co-founder and principal lawyer. Alex previously worked at a top-tier firm as a lawyer specialising in technology and media contracts, and founded a digital agency which he sold in 2015.
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If you run a UK company, the PSC rules aren’t optional - they’re a core part of your Companies House compliance. Getting them right from day one isn’t just a box-ticking exercise; it’s how you stay transparent, avoid fines and keep your cap table investor-ready.
In this guide, we’ll explain in plain English what the PSC rules are, how to identify your People with Significant Control, what you must record and file with Companies House, and the practical steps to stay compliant as your ownership changes over time.
What Are PSC Rules And Who Counts As A PSC?
PSC stands for “Person with Significant Control.” The UK’s PSC regime (in the Companies Act 2006, as amended by the Small Business, Enterprise and Employment Act 2015 and related regulations) requires most UK companies and LLPs to identify who ultimately controls them and to keep that information up to date.
A person or organisation will usually count as a PSC if they meet one or more of these conditions for your company:
- Holding more than 25% of the shares
- Holding more than 25% of the voting rights
- Having the right to appoint or remove a majority of the board
- Exercising, or having the right to exercise, significant influence or control over the company
- For trusts or partnerships: having significant influence or control over such an entity that itself meets any of the above conditions in relation to your company
Where the controller is another legal entity that is itself subject to disclosure (for example, a UK company with its own PSC register), that entity is recorded as a “registrable relevant legal entity” (RLE) rather than as an individual.
If you need a refresher on what “People with Significant Control” means in practice, it’s worth revisiting the concept of People with Significant Control in more detail before you map your ownership.
Do The PSC Rules Apply To My Small Business?
In most cases, yes. The PSC rules apply to:
- UK private companies limited by shares
- Companies limited by guarantee
- LLPs (with equivalent PSC conditions)
- Scottish partnerships (with differing filing rules)
Public companies with voting shares admitted to trading on a UK regulated market, or on certain specified markets, may be exempt because they’re already subject to separate transparency rules. If you’re unsure, get advice early - assuming an exemption when none applies can lead to criminal offences for the company and its officers.
If you’re at the formation stage, it’s sensible to build PSC compliance into your company setup process - right alongside choosing a name, appointing directors and issuing initial shares. When you Register a Company, plan how you’ll capture PSC details at incorporation and as your ownership evolves.
What Information Must You Record And File?
You have two duties: keep your own internal PSC register and provide PSC details to Companies House. Even if you think no one meets the conditions, you still have to keep a register showing the steps you’ve taken and your current status (for example, “no PSCs identified” or “investigations ongoing”).
Your Internal PSC Register
For each registrable PSC (or RLE), your internal register should record prescribed particulars, which typically include:
- Full name and date of birth (for individuals)
- Service address and usual country/state of residence
- Nationality
- Nature of control (e.g. “holds more than 25% of shares”)
- Date they became a PSC (or ceased to be one)
Some sensitive information (like the full date of birth and residential address) is not made publicly available, but you still need to collect and keep it. Companies House will display month and year of birth and a service address.
What You Must Deliver To Companies House
You need to file PSC information so it appears on the public register. Timing matters:
- Update your internal PSC register within 14 days of becoming aware of a change
- Deliver the update to Companies House within a further 14 days
You’ll also confirm PSC information each year through your confirmation statement. Bear in mind there are new identity verification and filing reforms emerging as part of Companies House modernisation - keep an eye on official updates, as your processes may need to adapt.
Public Disclosure And Protection
While transparency is the default, there’s a protection regime for individuals at serious risk of violence or intimidation due to their connection with a company. In limited cases, a PSC can apply to suppress public disclosure of certain details. If you think this might apply to your business or an individual PSC, get tailored advice before filing.
How To Identify PSCs In Practice (With Common SME Scenarios)
On paper, the tests look simple. In real life, cap tables can be messy. Here’s how to approach the exercise methodically.
Step 1: Map Your Ownership And Voting Rights
Start with your register of members and any agreements affecting voting. Look for anyone with more than 25% of shares or voting rights. If you’ve issued different share classes with different votes, consider those mechanics carefully.
Step 2: Consider Rights To Appoint/Remove Directors
Check your Articles and any side letters for rights that allow a person (or entity) to appoint or remove a majority of directors. This can push someone over the PSC threshold even if their shareholding is below 25%.
Step 3: Assess Significant Influence Or Control
This is a qualitative test. Examples might include veto rights over key strategic decisions or contractual rights that let someone direct company policy. If, in substance, someone can steer the company’s decisions, they may be a PSC even without equity.
Step 4: Look Through Corporate Owners
If an entity owns your shares, ask whether it is a registrable RLE. If it is, you’ll record that entity. If it’s not registrable (for example, it’s an offshore entity not subject to its own disclosure rules), you’ll need to look through the chain to find the individual(s) who ultimately meet the PSC conditions.
Step 5: Don’t Forget Trusts And Partnerships
If a trustee or partnership holds your shares, identify the person(s) with significant influence or control over that trust or partnership where it meets a PSC condition in relation to your company. It’s not unusual for family trust arrangements or investment clubs to sit behind shareholdings in startups and SMEs - dig deep enough to identify the real controllers.
Step 6: Record, Confirm, File
Once you’ve identified a PSC or RLE and obtained the necessary particulars, update your internal PSC register and file with Companies House within the statutory deadlines. If you’re still investigating, your internal register must state that fact and summarise the steps taken.
Ongoing Duties: Keeping PSC Information Up To Date
PSC compliance isn’t a one-off task. Ownership and control shift as you raise funds, transfer shares, or refresh your board. Build PSC checks into your routine governance so changes don’t slip through the cracks.
Events That Typically Trigger PSC Changes
- New investor subscriptions or buybacks (shareholdings crossing the 25% threshold)
- Share transfers between existing holders
- Issuing options or converting notes that alter voting rights
- Changes to rights in your Articles that allow appointment/removal of a majority of directors
- Board composition changes where a party gains effective control
- Restructurings, including holding company insertions or group reorganisations
Whenever you sign off a transaction, your board should consider whether the PSC position is affected. Minuting this analysis within your governance documents - alongside your Board Resolutions - is good practice.
Filing Deadlines (And Why They Matter)
Remember the time limits: 14 days to update your own register after becoming aware of a change, then a further 14 days to file with Companies House. Failing to comply is a criminal offence for the company and its officers, and can lead to fines and enforcement action.
What If You Can’t Get The Information?
You must take “reasonable steps” to identify PSCs. That usually includes sending formal notices to suspected PSCs or others who may know. If someone doesn’t respond, you can place statutory restrictions on the relevant shares (preventing transfers, suspending voting and dividend rights) until they comply. Keep clear records of notices sent, responses and any restrictions imposed.
Avoiding Pitfalls During Share Transfers And Investment Rounds
Most PSC issues surface during deals - that’s when percentage holdings and control rights move around. Planning ahead saves you time and frustration later.
Before A Share Transfer
Pre-completion, check whether the transfer will push a holder above or below the 25% mark, or change who controls voting. Update the PSC position in your transaction checklist and agree who will handle the notices and filings. Where your transaction involves moving equity between founders or early investors, organise the paperwork for the Share Transfer and the downstream PSC updates in one go.
During Investment Rounds
Term sheets and investment documents often include rights that impact control - board appointment rights, vetoes, reserved matters or drag-along/tag-along mechanics. These may create a PSC even if the investor is taking less than 25% of the equity. Coordinate your cap table, PSC analysis and governance documents together. A robust Shareholders Agreement and up-to-date Articles of Association Review help you understand and manage where “significant influence or control” sits after the round.
Group Structures And Holding Companies
If you insert a holding company or reorganise into a group, revisit your PSC position and consider whether the entity above you is an RLE. You may end up recording the holding company (if registrable), or looking through to the individuals behind it. In more complex structures, be methodical and document your reasoning so you can show you’ve taken reasonable steps.
Share Certificates And Member Registers
Your PSC register lives alongside your statutory registers of members and directors. When equity changes hands, make sure share certificates are issued/cancelled promptly and your member register is updated - those records support your PSC position. If your registers aren’t in good shape, fix them now; this is a great primer on Share Certificates and Member Registers for UK companies.
The Must-Have Process: How To Stay Compliant (And Investor-Ready)
Here’s a simple, repeatable process you can build into your board pack or company secretary routine. It keeps you compliant without creating admin headaches.
1) Assign Ownership
Make someone responsible (internal or outsourced) for PSC compliance. They’ll keep the internal register, send notices, file updates and track deadlines.
2) Map Control On Day One
At incorporation or the point you take over the company, map who meets the PSC conditions and gather the prescribed particulars. Document your reasoning (especially where you rely on the “significant influence or control” test).
3) Tie PSC Checks To Transactions
Add a PSC line item to your deal checklist for any share issue, transfer, buyback, option exercise, major board change, or governance update. If the PSC position changes, pre-draft the filings so they go in on time right after completion.
4) Maintain Clear Notices And Evidence
Use formal notices to suspected PSCs and keep copies. If a suspected PSC doesn’t cooperate, escalate to restrictions where appropriate. Evidence of “reasonable steps” is your safety net.
5) Minute Decisions
When your board approves a transaction, minute the PSC analysis and authorise filings and notices. Have a clear workflow for preparing and approving filings alongside your resolutions and deal documents.
6) Confirm Annually
As part of your confirmation statement process, cross-check your PSC register against your cap table, option ledger and any governance changes since the last filing. Fix any gaps immediately.
Frequently Asked Questions About PSC Rules
What If No One Meets The PSC Tests?
You still keep a PSC register that says “no registrable PSCs identified” and explains the steps you took. Continue to review after any material changes in ownership or governance.
Do LLPs Follow The Same Rules?
LLPs have an equivalent regime with tailored conditions, but the principle is the same - identify who ultimately controls the LLP and keep those details updated and filed.
Are There Penalties For Getting It Wrong?
Yes. It’s a criminal offence for the company and its officers to fail to comply with PSC duties. Companies House can also reject filings and, in severe cases, enforcement action can follow. The bigger risk for many SMEs is practical: deals can stall, investors can walk, and bank or grant applications can be delayed if your PSC records don’t line up with your cap table.
Do Options And Convertible Notes Affect PSC Status?
They can. While unexercised options don’t usually count as shares or votes, associated rights in your investment documents (e.g. board appointment rights or vetoes) may create “significant influence or control” for PSC purposes. Review the control position holistically during each funding step.
Which Documents Support PSC Compliance?
Your core governance documents should work together: Articles, cap table, member register, option ledger, board minutes and resolutions. Consider whether your shareholders need a Shareholders Agreement to clarify control rights, and ensure your constitution aligns with what’s on the public record after each change.
Key Takeaways
- The PSC rules require most UK companies and LLPs to identify who truly controls them, keep an internal PSC register and file PSC details with Companies House on time.
- A PSC is usually anyone with more than 25% of shares or votes, rights to appoint/remove a majority of directors, or significant influence or control; look through corporate owners to registrable RLEs or individuals where needed.
- Update your internal PSC register within 14 days of becoming aware of a change and deliver the update to Companies House within a further 14 days - missing deadlines can be a criminal offence.
- Build PSC checks into every equity or governance change, including investment rounds, Share Transfer transactions and group reorganisations, so your filings always match your cap table.
- Use solid governance documents to manage control rights - a well-drafted Shareholders Agreement, aligned Articles and clear Board Resolutions will make PSC assessments faster and clearer.
- Keep your statutory registers in good order - accurate Share Certificates and Member Registers support your PSC position and help you stay investor-ready.
- If you’re just setting up, bake PSC into your formation checklist when you Register a Company, and revisit whenever control rights change.
If you’d like help setting up or maintaining your PSC register, reviewing your Articles, or aligning your shareholder documents with the PSC rules, our team can help. Call us on 08081347754 or email team@sprintlaw.co.uk for a free, no-obligations chat.
