Figure: the correct PSC for Company A, B and C with UK companies compared to overseas companies.

October 4th, 2018

The PSC Register – Offshore Companies and Indirect Interest

The PSC register can be confusing and is regularly causing huge amounts of information gathering between our team, our clients and your clients as we try and get the correct information for the register. One particular rule that is worth addressing is, what is the correct PSC to register when offshore companies are shareholders of a company?

If the offshore company is deemed a PSC by meeting at least one of the PSC conditions, a further check is required to see if the offshore company itself has any individuals or companies that would meet PSC criteria, as they are required to be registered as the PSC not the offshore company.

The Guidance from Companies House is as follows

The three PSC criteria are as follows:

  • A person or Legal Entity holding over 25% of the share capital
  • A person or Legal Entity with 25% or more of the voting rights of the company
  • A person or Legal Entity who has the right to appoint and remove directors

The shares and rights in a company might be held indirectly when someone has a majority stake in the legal entity that meets the PSC criteria.

For companies registered in the UK (including LLP’s and Scottish partnerships and SE’s) that person is not required to be entered on the PSC register unless the legal entity they hold their interest through is not a RLE. This is the case for the following:

A legal entity might not be an RLE because:

  1. It is a UK legal entity which is not a company, LLP, eligible Scottish partnership or SE; or
  2. It is a non-UK company

Instead, you must look at the ownership and control of that legal entity to identify any individuals or RLEs who have a majority stake in that legal entity. Someone will hold a majority stake if:

  • They hold a majority of the voting rights in the legal entity > 50%
  • They are a member of the legal entity and have the right to appoint or remove a majority of its board of directors;
  • They are a member of the legal entity and control a majority of the voting rights by agreement with other shareholders or members

See the chart to compare the PSC for each company A, B, and C when companies are UK companies compared to the final diagram when there are overseas companies in the ownership structure.

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