This guide is maintained as a current resource for November 2026 and covers only the laws of England and Wales. Information is for general guidance, not legal advice. Consult a qualified solicitor for advice specific to your situation.
Clear explanation of Person with Significant Control legal definition and thresholds in UK company law, including 25% shareholding rules, voting rights, board control, and Companies House requirements under the PSC regime and Small Business, Enterprise and Employment Act 2015.
A Person with Significant Control (PSC) is an individual or legal entity that ultimately owns or exercises control over a UK company. The PSC regime applies to most companies incorporated under the Companies Act 2006 in England and Wales and is a core part of the UK's corporate transparency framework.
The PSC rules require companies to identify and record individuals or entities that have significant influence over the company's decision-making, ownership structure, or financial control. These requirements were introduced under the Small Business, Enterprise and Employment Act 2015 to increase transparency and reduce misuse of corporate structures.
Understanding the legal definition and thresholds is essential for compliance, corporate governance, and accurate Companies House reporting.
Legal Definition of a Person with Significant Control
A person or entity is classified as a PSC if they meet one or more statutory conditions that demonstrate ownership or control over a company. These conditions are set out in UK legislation and official guidance issued by Companies House.
A PSC is typically someone who:
- Holds a significant shareholding in the company
- Exercises significant voting power
- Has control over the appointment or removal of directors
- Otherwise exercises significant influence or control over the company
The definition captures both direct control (through share ownership) and indirect control (through arrangements such as trusts, agreements, or corporate structures).
The PSC Thresholds Explained
The law sets specific thresholds to determine when control becomes “significant”. These thresholds are applied individually and not cumulatively.
1. Shareholding threshold (more than 25%)
An individual or entity is a PSC if they:
- Hold more than 25% of the company's shares
This is the most common PSC condition in practice. It applies whether shares are held directly or indirectly through another company or structure.
2. Voting rights threshold (more than 25%)
A person is a PSC if they:
- Hold more than 25% of the voting rights
Voting rights may differ from share ownership in companies with multiple share classes. A person may not own a large percentage of shares but still control voting outcomes.
3. Board control threshold
A PSC includes anyone who:
- Has the right to appoint or remove a majority of the board of directors
This reflects control over corporate governance rather than ownership. It is particularly relevant in private companies and joint ventures.
4. Significant influence or control (catch-all test)
A person is a PSC if they:
- Exercise or have the right to exercise significant influence or control over the company
This is a flexible legal test designed to capture control that is not reflected in shareholding or formal voting rights.
Examples may include:
- Veto rights over key financial or operational decisions
- Control through shareholder agreements
- Influence via trust arrangements or nominee structures
- De facto control exercised in practice
This condition ensures that hidden or indirect control is still disclosed.
Legal Entities as PSCs
Not only individuals can be PSCs. A legal entity can also be recorded if it meets the same thresholds. This typically includes:
- Parent companies in a corporate group
- Holding companies
- Certain trusts or partnerships (where applicable under transparency rules)
Where a legal entity is a PSC, the individuals who ultimately control that entity may also need to be identified.
Direct vs Indirect Control
PSC rules distinguish between two types of control:
Direct control
Occurs when an individual personally meets one or more PSC conditions, such as owning more than 25% of shares.
Indirect control
Occurs when control is exercised through another entity, such as:
- A holding company structure
- Trust arrangements
- Chains of ownership
Indirect PSC identification ensures transparency of ultimate beneficial ownership.
Practical Examples of PSC Identification
Example 1: Majority shareholder
An individual owns 60% of shares in a company. They automatically qualify as a PSC due to exceeding the 25% threshold.
Example 2: Split ownership
Three individuals each own 30%, 30%, and 40% of shares. All three are PSCs because each exceeds the 25% threshold.
Example 3: Non-shareholder controller
An individual holds no shares but has contractual rights to appoint all directors. That individual is a PSC due to board control.
Example 4: Corporate ownership
A parent company owns 100% of a subsidiary. The parent company is a PSC, and the individuals controlling the parent may also need to be disclosed.
PSC Identification at Incorporation
At incorporation, companies must:
- Assess whether any PSCs exist immediately
- Record PSC details in the company's PSC register
- File PSC information with Companies House
- State “no PSC identified” if none exist at formation
This ensures transparency from the first moment of corporate existence.
Legal Duties After Identification
Once identified, PSCs must be kept up to date. Companies are required to:
- Update PSC records when ownership or control changes
- Notify Companies House within statutory deadlines
- Maintain an internal PSC register at the registered office
- Confirm PSC details in the annual confirmation statement
Failure to comply can lead to criminal liability for company officers and regulatory enforcement action.
Legal and Compliance Risks
Failure to identify PSCs
Incorrect or incomplete identification may result in:
- Criminal offences
- Financial penalties
- Restrictions on company operations
Concealment of control
Deliberate failure to disclose PSC status can be treated as serious corporate misconduct and may attract enforcement action.
Banking and regulatory consequences
Banks and regulated entities may refuse services where PSC data is missing or inconsistent.
Due diligence issues
Inaccurate PSC records can delay:
- Investment transactions
- Mergers and acquisitions
- Commercial contracts and credit facilities
Importance of PSC Thresholds in Corporate Law
PSC thresholds play a key role in:
- Corporate transparency and accountability
- Anti-money laundering compliance
- Investor due diligence
- Regulatory oversight of corporate structures
- Prevention of hidden ownership arrangements
They ensure that control of UK companies is traceable to identifiable individuals or entities.
Common Questions from our Readers
Is 25% ownership always enough to be a PSC?
Yes, holding more than 25% of shares generally meets the PSC threshold, unless complex indirect arrangements alter control analysis.
Can someone be a PSC without owning shares?
Yes. Control through voting rights, board appointment powers, or significant influence can establish PSC status.
Are PSC details public?
Most PSC information is publicly available on the Companies House register, although certain personal data is protected.
Can there be multiple PSCs in one company?
Yes. A company may have several PSCs if multiple individuals or entities meet the statutory thresholds.
Key Takeaways
A Person with Significant Control is an individual or entity that owns or exercises significant influence over a UK company. The legal thresholds include holding more than 25% of shares or voting rights, controlling board appointments, or exercising significant influence.
The PSC regime ensures transparency in company ownership and is a key part of UK corporate compliance. Companies must identify PSCs at incorporation, maintain accurate records, and update information as changes occur.
