What is a PSC?
Definition of a PSC
PSC stands for Person with Significant Control. A PSC has the right to exert significant influence, or control, over the business and management of a limited company or LLP.
What qualifies a person to be a PSC?
A PSC might be determined in in one or more of five ways:
- The individual owns more than 25% of the shares in the company.
- The individual owns more than 25% of the voting rights in the company.
- The individual has the right to appoint, or dismiss, the majority of the members of the company’s board of directors.
- The individual has the right to exercise, or actually does exercise, significant influence or control over the company.
- The individual is a trustee of a trust, or a member of a firm, that meets one of the specified conditions above, and the individual has the right to exercise, or actually does exercise, significant influence or control over the activities of that trust or firm.
Frequently Asked Questions
Does being a director make me a PSC?
HMRC have not said definitely one way or the other whether being a director of a company, including being sole director of a company, automatically makes an individual a PSC. Judging by the five points, it might be assumed that a sole director-shareholder of a company would be a PSC by virtue of their 100% shareholding (satisfying the first condition, owning more than 25% of the shares), rather than by virtue of their directorship.
Got questions? Ask Emily!
FreeAgent's Chief Accountant Emily Coltman is available to answer your questions in the comments.