Updating people with significant control

People with significant control, or PSCs, are identified by ownership and control tests rather than by job title alone. A company must investigate who meets the relevant conditions and keep Companies House informed when that position changes. A share transaction can therefore require more than a shareholder update. ^[1]

Review all relevant control rights

Common conditions include holding more than 25% of shares or voting rights and having the right to appoint or remove a majority of the board. Significant influence or control can also matter. Complex arrangements involving trusts, companies or joint rights need a fuller assessment. ^[1]

Do not assume that the person called the founder is necessarily the only PSC. Equally, being a director does not automatically establish significant control. Read the rights attached to shares and any agreement affecting votes or appointments.

Identify the event and evidence

Record what changed, when it changed and which documents establish it. This may involve an allotment, transfer, amended voting agreement or change in an ownership chain. Distinguish a change in the nature of control from a change in a person's contact details.

Prepare a before-and-after ownership and voting schedule. Percentages should reconcile to the relevant totals, and assumptions about indirect ownership should be made explicit rather than hidden in a spreadsheet formula.

Complete the required notifications

Use the current PSC guidance to determine the correct information and reporting timescale. Report changes through the relevant process; do not wait for the annual confirmation statement to deal with a known event. If no PSC can be identified, the company must still use the appropriate reporting statements. ^[1]

The obligation is not satisfied simply by leaving an entry blank. Keep records of enquiries made and information received so the company can explain how it reached its conclusion.

Treat verification as a separate step

PSCs must meet the applicable identity verification and personal-code requirements. Timing depends on the person's circumstances. A director who is also a PSC must provide verification information separately for those roles. ^[2]

Review checklist

• Identify the control condition or conditions affected.
• Confirm the event date and supporting documents.
• Check the required personal or entity information.
• Complete the relevant filing and verification steps.
• Save acknowledgements and verify the updated entry.
• Set a reminder for any further information still outstanding.

Calculate rights using the correct denominator

A simple share count can hide different voting rights. Suppose three people own 40, 35 and 25 ordinary shares with equal votes. The first two meet the more-than-25% share and voting conditions. The third does not meet those particular conditions merely by holding exactly 25 shares, but other rights still need examination. This illustration assumes identical rights and no additional arrangements.

Now consider a second class that carries different votes or an agreement giving one person appointment rights. Recalculate the relevant rights rather than copying percentages from an economic ownership chart. Options, conditional transactions and rights held through entities require careful analysis; do not assume that every item in an investment spreadsheet counts in the same way for PSC reporting.

Ask questions that uncover control arrangements

Request the current articles, shareholder agreement, recent transfers and any voting or nominee arrangements. Ask whether another person directs how rights are exercised. Where a company appears in the ownership chain, identify its jurisdiction, legal form and reporting position before deciding which entity or individual should be recorded. A diagram is useful only when the documents support each connection.

Keep enquiries factual. Instead of asking a founder to confirm that nobody else controls the business, ask about appointment powers, reserved decisions and arrangements affecting votes. Record unanswered questions and the steps taken to resolve them. A lack of cooperation does not justify replacing a complex ownership position with the most familiar director's name.

Separate three kinds of change

An ownership transaction can create a new PSC, change an existing PSC's nature of control or cause someone to cease meeting a condition. A change of address affects particulars without necessarily changing control. Identity verification is another requirement with its own timing. List these separately so that completing one task does not cause the others to be marked finished by mistake.

For an individual who is both a director and PSC, keep a role-specific record of what has been provided and when. Restrict access to personal codes. A general cap table circulated to potential investors should not contain verification credentials or private residential information simply because the same administrator maintains both records.

Review after the transaction has completed

Compare the accepted information with the final ownership documents, not the initial negotiation draft. If the transaction changed before signing, check that the filing instructions changed too. Schedule a further assessment when rights lapse, convert or become exercisable under an agreed arrangement.

For the underlying voting analysis, see Beneficial ownership and voting arrangements. Where the control position is established and you need reporting assistance, Director and PSC changes sets out the relevant company administration support.

If the ownership arrangement is disputed, seek advice before filing a definitive account that the evidence does not support. The aim is an accurate record of control, not merely a convenient name on the register.