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What is a Person with Significant Control (PSC)?

A PSC, or Person of Significant Control, is any individual who owns, or is in control of your company; they’re sometimes also known as Beneficial Owners (BOs).

In April 2016, it became compulsory for every LLP and unlisted company in the UK to have a PSC register, where they log any and all PSCs within their business. PSCs must also be declared to Companies House, so it can be added to the national PSC Register too; you can do this via the online submission form. This measure is intended to deter bribery, corruption and money laundering, as well as improve corporate conduct.

Who qualifies as a PSC?

A PSC within your company could be anyone who meets one or more of the following criteria:

·         Has more than 25% of the company shares

·         Has more than 25% of the company’s voting rights

·         Has the authority to appoint or dismiss the majority of the board of directors

·         Has any other way of exercising influence on the business

·         Has any other way of exercising influence on a trust/firm which in turn controls the company

With these qualifying factors in mind, it’s worth remembering that any company can have multiple PSCs at any one time, as there might be several individuals who hold more than 25% of the shares or voting rights and etc.

Companies Limited by Guarantee

Lots of charities and non-profit organisations in the UK are set up as companies limited by guarantee; these companies usually have guarantors rather than shareholders. Any profit made tends to be redistributed internally for reinvestment, or to further the organisation’s objectives, rather than being paid to members.

Despite the fact that companies limited by guarantee don’t have shareholders or capital to speak of, they can still have PSCs if an individual in the business meets any of the criteria listed above.

PSC Registers

A PSC register is a list of documented PSCs in your company. You’re required by law to have a PSC register for your business, even if there are no PSCs within it, or you’re still investigating who qualifies.

When you record your PSC’s information on the company’s register, you’ll need to include the following details:

-         Name, address and date of birth

-         Nationality and country of residence

-         Information regarding when and how they became a PSC

-         Information regarding their shares and voting rights

-         Information regarding the level of control/influence they have

-         Any application for the information to be kept private from public disclosure  

You also need to communicate a list of all the PSCs within your business to Company House, so that they can be officially added to the PSC Register; failing to do this is a criminal offence.

If any information regarding your PSCs changes, you should update your records and inform Company House as soon as possible, which you can do online.

Why is checking PSCs important for AML regulations?

The 2016 PSC regime was established to make it more difficult for anyone who hides their ownership or control of a business, in order to enable illegal activities.

When a corporation’s PSCs are public knowledge, you’re able to see directly who would stand to benefit from any illegally made proceeds, which helps to discourage financial crimes like money laundering.

Due to their influential positions, PSCs are naturally targeted by those who wish to carry out financial misconduct. Once you have access to a PSC’s details, you can run all the standard AML checks against them, like screening for sanctions and adverse media. This is another way of reducing the money laundering threat to your firm, by ensuring your customer is reputable before you go into business with them.

What happens if you don’t comply?

If your company doesn’t comply with the latest PSC requirements, you can face serious consequences. The government can issue you with a sizeable fine, or a prison sentence of up to two years. This applies to both offences carried out by the company and also by the PSCs themselves.

SmartSearch can carry out PSC checks retrospectively, so we’ll always be able to see exactly who the past and present PSCs are in any given firm, providing they’re on public record.

SmartSearch Can Help

The extensive SmartSearch platform can check the current and previous PSCs for every firm registered with Company House, making your AML compliance and risk-management even more convenient.

Our services are secure and reliable, and we use exceptional resources like the Dow Jones WatchList to ensure that the information we provide is unfailingly accurate, and up to date. 

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