In a previous blog post, we looked at the requirement to provide information about the nature of business that new companies in Scotland have to give to Companies House. Here we look at the more complex, additional requirement for applications for new Scottish companies to include information about who is in control of the company.
The requirement to submit details of People of Significant Control (PSCs) with all new company applications was introduced on 30th June 2016.
How do I identify my PSC?
A PSC is:
anyone who holds more than 25% of the shares in the new company
anyone holds more than 25% of the voting rights in the new company
anyone who has the right to appoint or remove a majority of the new company’s board of directors
anyone who has the right to exercise significant influence or control over the new limited company
where shares are held by a trust or firm, anyone with the right to exercise influence or control over a trust or a firm
If any of the first three conditions are met, then you do not need to worry about the last two.
New Scottish Company Limited
As sole shareholder, Mr. A has more than 25% of the shares and so is a PSC.
Can I have more than one PSC?
Definitely. In the examples shown below, you can see more than one instance where there could be multipe people with significant control.
Another New Scottish Company Limited
Here, husband and wife are equal shareholders, so both are PSCs. Even in the example below where there is a third shareholder, Mr. and Mrs. M are still the only PSCs as Mr. X holds less than 25%.
Is it possible to have no PSCs?
It’s quite possible for a new company not to have any People with Significant Control. For example, if there are 5 members of a company with equal shares of 20% each, no individual shareholder’s stake would exceed 25% and there would therefore be no PSC, unless other conditions were met. If that is the case, the new company application should include a statement to this effect.
Do take note that a PSC is not necessarily a shareholder of the company by default. If they have absolute rights regarding decisions to appoint or remove the majority of the directors or the final say on business decisions, they are a PSC.
What information do I need to provide?
The same information that is required for company directors, with the addition of the nature of the control.
For help with your PSCs or any other aspect of the company formation process in Scotland, please do get in touch. The Jordans Scotland team has decades of experience in company formations and look forward to making it work for you and your business.