Formation of a Private UK’s Company - PSC Registers Requirements FAQ

UK companies are now required to identify and record the people who own the companies (beneficiaries) or the persons who own control of the organization. The register is available to the public and is an addition to the directors and shareholder register.

All directors must identify and record the details of the PSC on public register; they must also update the register whenever there is a change of circumstances, the director must keep a record of how the PSC was identified, and in some cases demonstrate how the firm has failed to identify a PSC.

Existing companies can record the details of their PSC when filing the confirmation statement (replacing the old annual return), all newly incorporated entities must provide details of the PSC with the incorporation application, and the new organization will not be created unless a PSC is provided or a PSC statement is submitted.

The PSCs name, surname, date of birth (month and year of birth only), nationality, country of residents and the service address will appear on the public register, furthermore the date the person become a PSC and the level of control will also be available on the public records.

Failure to provide accurate information on the PSC register and failure to comply with notices requiring someone to provide information are criminal offences, and may result in a fine and or a prison sentence of up to two years.

Third party directors and shareholders never were the actual owners of the organizations, they always acted on behalf of the real owners ("shadows directors"). Professional firms, who offered the provision of nominees, always signed special set of documents in between the nominees and the beneficiary owners to avoid any kind of responsibilities which could happen from the side of the real owner.

Yes, we need to register you, or the third person, who controls the firm as the person with the significant control. Third party director is receiving instructions from the real owner, third party shareholder hold shares on behalf of the beneficiary owner, means, your nominees cannot be appeared as the person with the significant control, because they are not controlling the business at all.

A private company can identify a PSC by examining the companies register and other constitution documents such as the articles or internal resolutions.

If the individual has 25% or more voting rights or is involved in the day to day running of the business, then this person qualifies as a PSC and must-be-listed on the PSC public records, the person will be deemed to have significant control of their business.

Any individual who holds over 25% of the shares will qualify as a PSC, this can be identified through the register of members/subscribers, or through the latest filed confirmation statement (or the old annual return).

Yes, any person who has the power to add or remove the majority of the board of directors, or exercises actual influence over the organization will qualify as a PSC, this individual can be the actual beneficiary or someone who regularly sit on the board meetings, or has indirect connection through a parent firm or trust.

No, third party directors and shareholders are generally appointed for record purposes only, and in most cases have little or no influence over the day to day running of the business. In this case the person who qualifies as a PSC will generally be the beneficiary or/and the person(s) who hold the general power of attorney.

If your private company has five or more shareholders, who are the private individuals, and none of them holds more than 25% of shares, you do not need to identify and register a person with the significant control. If your shareholders are the corporate bodies, you need to be sure, that their ownership does not belong to one or two private individuals. If such corporate shareholders belongs to one or two people, you need to register them as the persons with the significant control.

It depends on the situation, let’s say, that you are a director, and its sole shareholder. You might split the private company ownership with other four additional shareholders, but if they do not have the significant influence or control over a firm, you need to be documented as the PSC. The ownership does not automatically refer to the person with the significant-control, the significant influence or control over a firm is the second important part of the legislation.

In some cases, a private company can list a corporate body as person with significant control (relevant legal entity), this is done to either avoid duplicate entries on Companies House, or the corporate body listed is already regulated to a level which meets the PSC purpose or objective. It means, if the UK established corporation "A" passed the PSC requirements and recorded information about the person with the significant control, and such entity is the shareholder of another UK organization "B", the "B" firm can use it as the relevant legal entity.

If the corporate entity concludes that significant control is exercised by another corporate body, then it is entitled to list this corporate body on the PSC register only if꞉ -

(a) The corporate body is a UK entity and this entity has already provided an up to date PSC register, in this case there is no need to enter the same PSC details twice, the level of transparency required by the introduction of the PSC register has been satisfied;

(b) The corporate body is an incorporated charity, listed on the stock exchange or regulated by the FCA, in this case the corporate body is already strictly regulated and would already meet the transparency criteria and can be listed as a PSC.

A foreign entity can only be recorder as the company's PSC if it is an established charity, listed on the stock exchange or regulated by the FCA. If the entity is not regulated by any of the authorities, then it cannot be listed as a PSC as this will not offer enough transparency demanded by the PSC regulations. In this case the person who has significant control or the beneficiaries of the foreign entity would qualify as the PSC for the UK firm.

If your Cyprus corporation acts as the shareholder of your British incorporated entity, you can entry it as the relevant legal entity, if꞉ - it keeps its own person with the significant control registers in Cyprus; or It is subject to Chapter 5 of the FCA's disclosure and transparency; or It has voting shares admitted to trading on a regulated market in the UK or EU, in Switzerland, USA, Japan and Israel.

As far as it is not necessary to keep its own person with the significant control registers in Cyprus, you cannot list your Cypriot firm as the relevant legal entity.

Yes, all business entities registered in the UK, including the limited partnerships, limited liability partnerships, companies limited by guarantee and limited by shares and unlimited companies are require to file information about the person with the significant control or relevant legal entity. There are no exemptions.

Yes, as described in examples above, the British limited company must comply with the PSC disclosure requirements at all times, even if its owned by an offshore holding.

It is not only the direct control over the society that identifies the PSC. There are several criteria explained above under which the test is made, and PSC is identified. Being final owner of a foreign holding and having been granted the power of attorney on behalf of the company to present it in any transactions, you automatically qualify as a person of control.

Yes, each corporation must submit information about person of control regardless of the ownership, except cases described above where RLE rule applies.

No, a foreign trust cannot be considered as a person of control, as only a private individual can be listed in the PSC section. Moreover, not being a registered legal entity, trust does not qualify for the position of a RLE.

The data about person of control is still required even if corporation is owned by a trust.

Unless there is anyone else who is influencing the decision making in the company and due to the way trust is managed, the trustee of the trust are listed as a person of control as those who exercise the control and management of the trust and the entity, which is managed by this trust.

Yes, sure. If you still have questions about the person with significant control, or the relevant legal entity, feel free to contact us.

There are no offshore companies in the UK. All local companies are considered as the tax resident organizations in the UK, and are required to declare their profits, submit their accounts and tax return and pay the tax in the Great Britain from its worldwide income.

The UK is not an offshore heaven. Scotland is the part of the Great Britain and local Scottish companies are subject to the same tax regime as companies registered in other parts of the United Kingdom.

Companies Act 2006 applies to all companies incorporated all over the United Kingdom. There is no difference between companies registered in England, Wales, Scotland or in Northern Ireland except for the location of the domiciled office address.

Unlimited companies are not required to file annual accounts with Companies House, which means that the affairs of the business are kept away from public records and shareholder's dividends aren't made public.

There is no requirement for a British LTD to pay its capital at the time of incorporation. Share capital can be paid at later stage. The capital can be fully or partly paid; this will need to be reflected in the corporation's accounts.

Companies Act (Corporate Law) does not prohibit people on student visa from registering a company here; however, there might be issues with opening a bank account. This might also be in breach of your immigration status, so we suggest you to seek a legal advice from a professional, we cannot help you with such issues.

Local registered companies can seek the banking facilities in any location where it's convenient for their activities.

Local banks tent not to open accounts for private companies which are owned and managed by non-British residents.

Application for VAT registration can take between 2 to 8 weeks. For entities which do not have physical place of business in the UK and managed from overseas, processing of the VAT application can take up to 4-8 weeks.

HMRC reserves the right to reject VAT application if they are not satisfied application is made for a genuine business; if the director of the organization had previously defaulted on VAT via other business; if business does not have sufficient turnover, only does exempt suppliers or only except VAT refunds/repayments; if additional data requested by the HMRC on the base of original application is not provided within set amount of time.

Coddan works closely with solicitors, notaries, UK legalization office (FCO), various consulates and embassies. We can offer standard and expedited legalization services of various corporate documents. Fees vary depending on the terms of legislation offered by the consulates. Should you require consulate legalization service, feel free to contact us for a quote.

By law, companies do not require to use a seal. If the seal is essential for the business, then a special resolution of the board of directors will be required to about the seal and to approve its image. Documents which are certified by the seal will have to bear two signatures꞉ of two directors, of director and a secretary, of director and a witness.

Certificate of good standing is usually not required for newly registered entities but may be requested by your bank. Should this document be needed, Coddan will be glad to assist. Document can be issued as certified by the Companies House or can be legalized with Apostille stamp as well. Your Certificate of Incorporation is will be printed on Companies House approved paper document.