Every UK company has to keep a record of the individuals who ultimately own or control it, and file that record with Companies House. This article explains who counts, what must be recorded, and how a funding round can change the answer without anyone intending it to.
What is a person with significant control?
A person with significant control, usually shortened to PSC, is someone who owns or controls a company. The register is sometimes described as a record of beneficial owners. According to GOV.UK guidance, a PSC is usually someone who meets at least one of several conditions:
- they hold more than 25% of the company’s shares or voting rights;
- they can appoint or remove a majority of the directors;
- they can influence or control the company, or a trust that controls it.
GOV.UK adds a fourth, narrower category: people who exercise significant influence or control in other ways, which applies only in limited circumstances.
The test is about control, not job titles. A director who owns no shares is not automatically a PSC, and a passive shareholder with a large stake can be one without ever attending a meeting.
Why does the register matter to a startup?
The register is public. It sits alongside the officers and filings that anyone can read on the Companies House service, and it is one of the tools used to show who is behind a corporate vehicle. For founders, that has three practical consequences.
First, accuracy is a legal duty rather than housekeeping. Second, investors, banks and acquirers will compare the register with the cap table during due diligence, so a mismatch is an avoidable source of delay. Third, the register is a clear record of how control has shifted since incorporation, which is useful context for the questions covered in our look at why founders are selling early.
How do the ownership bands work?
Companies do not simply tick a box. According to GOV.UK, a company records each PSC’s level of control in one of three bands:
| Band | Shares or voting rights |
|---|---|
| Lowest | Over 25% up to and including 50% |
| Middle | More than 50% and less than 75% |
| Highest | 75% or more |
Two details are worth noting. The threshold is “more than 25%”, so a holder of exactly 25% does not meet the share-based condition on that basis alone, although other conditions, such as the right to appoint directors, could still apply. And the bands apply to shares and to voting rights separately, which matters when a company has different classes of share carrying different votes.
What does a worked example look like?
The following is illustrative arithmetic, not a description of any real company. Imagine a company with 1,000 shares in issue, all with equal votes:
- Founder A holds 600 shares (60%).
- Founder B holds 250 shares (25%).
- An early investor holds 150 shares (15%).
On those numbers, Founder A is a PSC in the middle band, because 60% is more than 50% and less than 75%. Founder B holds exactly 25%, so the share test is not met on its own. The investor, at 15%, is below the threshold.
Now the company raises a round and issues 400 new shares to a new investor, taking the total to 1,400:
| Holder | Shares | Share of total |
|---|---|---|
| Founder A | 600 | 42.9% |
| Founder B | 250 | 17.9% |
| Early investor | 150 | 10.7% |
| New investor | 400 | 28.6% |
The new investor, at 28.6%, now exceeds 25% and must be recorded as a PSC. Founder A has slipped from the middle band to the lowest band, at 42.9%. Nobody sold anything, yet the register changes in two places. Figures are rounded to one decimal place.
What must the company record, and by when?
According to GOV.UK, the company must identify each PSC and record which conditions they meet. It must confirm the person’s details before submitting them, including name, date of birth, nationality, country of residence, service address and home address. The home address is not disclosed publicly. The company must also try to identify and contact anyone who might be a PSC.
On timing, the guidance says changes must be reported “within 14 days of confirming the change”. In practice, that means a share allotment, a transfer or a change to a shareholders’ agreement should trigger a quick check of the register, not a note for the next annual filing.
Can a company have no PSC?
Yes, but it cannot leave the field blank. GOV.UK states that PSC information “cannot be blank”. If a company has no PSC, it must say so, and give the reason, by registering a PSC statement. This is not unusual for companies with widely dispersed ownership, where nobody crosses a threshold and no individual controls the board.
For a typical venture-backed startup, though, the founders usually hold the largest blocks early on, so a blank register is rare at first. Dilution across several rounds is what eventually produces the “no individual above 25%” position, which sits alongside the broader pattern in the rise of the solo founder, where one person can often hold a clear majority for longer.
What happens if a company or shareholder does not comply?
The legal consequences are serious. According to GOV.UK, refusing to provide PSC information is a criminal offence. So is failing to respond to a company’s notice within one calendar month, or giving false information. The maximum penalty is “a 2 year prison sentence, a fine or both”.
The guidance also notes that a company can apply restrictions to a PSC’s shares or voting rights, but describes this as a significant step to be considered only where someone has repeatedly failed to respond to requests. For founders, the lesson is that investors and co-founders who hold large stakes should expect to be asked for information and should answer promptly.
Which situations catch founders out?
Several common startup arrangements deserve a second look against the control conditions:
- Option pools. Options that have not been exercised are not shares in issue, but exercise can move someone across a threshold. A scheme such as the one in our explainer on EMI share options is worth reviewing against the register when large grants vest.
- Shareholders’ agreements. Rights to appoint or remove a majority of directors can make an investor a PSC even with a modest shareholding.
- Holding companies and trusts. GOV.UK says that where a trust or firm without legal personality meets a condition, all of its trustees or members or partners are recorded as PSCs, so a founder’s family structure can add names to the register.
- Indirect holdings. The test looks through to the individuals at the top of a chain, so a holding company does not remove the need to identify the person behind it.
The guidance does not cover every exemption or complex case, and the full statutory guidance should be consulted for unusual structures.
Keeping the register right
GOV.UK says a person can apply to keep their PSC information off the public register, with protection starting on the date the application is made. That is a narrow route, not a general privacy setting. For everyone else, the sensible approach is a routine, not a rescue.
- Reconcile the cap table with the PSC register whenever shares are issued, transferred or cancelled.
- Check the board-appointment rights in any new investment agreement, not just the percentages.
- Diarise the 14-day window from the moment a change is confirmed.
- Keep investors’ and co-founders’ contact details current, so notices can be served and answered.
Companies that treat this as part of closing a round, alongside the paperwork discussed in how EIS and VCTs work after the April 2026 changes, tend to avoid the awkward corrections later.
The register is a map of control, so keep it current
The PSC register is easy to dismiss as a form, yet it records something founders care about a great deal: who holds the levers. A funding round, a transfer or a new board right can change that picture in days, and the law expects the register to follow within 14 days of confirmation. Founders who reconcile it with their cap table as a matter of routine protect themselves from penalties and from due-diligence surprises.
This article is general information, not personalised financial or legal advice. Rules, thresholds and deadlines change, so check current guidance for your own circumstances.
Sources: GOV.UK
