PSC02 Form Explained: People with Significant Control

Running a company in the UK means getting acquainted with a lot of paperwork from the moment you register your business. Some of it is clear and straightforward, but every so often you’ll come across a form that simply feels incomprehensible. One of the most confusing ones is the PSC02 form. If you’re feeling lost about what it’s for, who needs to file it and what happens if you don’t - this guide is for you.

Let’s break down the PSC02 form and how to get it right.

What is a PSC02 form?

The PSC02 form, or the Notice of relevant legal entity with significant control, is the form you can submit to Companies House to inform them that a company, partnership or other legal body has significant control over your business.

That’s exactly what the”PSC” abbreviation from the form name means - People with Significant Control. These PSCs are individuals who make the key decisions in a company. But it’s important to remember that PSCs don’t have to be individuals. Sometimes, another company, or a relevant legal entity (RLE) pulls the strings.

Every business is required to keep a register of its PSCs and RLEs and update it regularly.

Who counts as an RLE?

According to UK law, a legal entity has significant control if they meet one or more of these conditions:

• Owns more than 25% of the company’s shares.
• Holds more than 25% of the company’s voting rights.
• Has the right to appoint or remove the majority of the board of directors
• Exercises significant influence or control over the company
• Controls a trust or firm that meets one of the above conditions

So, if a legal entity, such as another company, meets any of these criteria, they’re considered an RLE.

Note: If it’s an individual whose details you want to register, you’ll use the PSC01 form. PSC02 is specifically for notifying Companies House of an RLE.

When do I need to file a PSC02 form?

You have to file a PSC02 form whenever a relevant legal entity gains significant control of your company. For example:

• If another company acquires more than 25% of your shares.
• If a holding company gains voting rights that allow it to control your board decisions.
• If a partnership or trust begins exercising significant influence over your business.

Be careful not to confuse PSC02 with the other forms. If the details of an existing PSC or RLE change (such as their name or address), you’d need PSC04 (for individuals) or PSC05 (for RLEs). If an RLE ceases to be a PSC, then you’d use PSC07. PSC02 is only for notifying Companies House that a new RLE has become a PSC.

Why is it important to keep PSC and RLE records updated?

Keeping your PSC and RLE records up to date might seem like just one additional piece of red tape. However, it’s a very serious legal requirement. Companies House uses this information to ensure corporate transparency in the UK. Their ultimate goal: make it harder for shady operators to hide behind shell companies and use them for crime.

Without accurate and transparent PSC information, it would be much easier for criminals to launder money or hide who’s really pulling the strings.

This is also why Companies House has recently tightened rules about verification. Luckily, ANNA is now an official identity checker, which means you can handle these compliance checks quickly and securely, without the extra paperwork.

What happens if I don’t file on time?

Because Companies House takes all of this very seriously, it’s natural that if you don’t comply, you will face some penalties.

1. Financial penalties

Companies House can issue fines if a company doesn’t keep its PSC or RLE records up to date.
Daily default fines can also apply until the filing is corrected. The exact fine varies, but it can amount to thousands of pounds if left unaddressed for long periods. Imagine your simple missed update snowballing into a hefty fine that eats into your profits - it’s much easier and cheaper to file the form on time.

2. Personal liability for directors

Directors are legally responsible for ensuring PSC and RLE details are accurate and filed on time.
If you fail to do this, you can be personally fined, not just your company. This means that your personal finances, as well as your professional reputation, are at stake, which could follow you into future business ventures. In extreme cases, you could face criminal prosecution, especially if the non-compliance looks intentional.

3. Criminal sanctions

For serious or repeated breaches, directors can face up to two years in prison. While jail time is rare, the threat shows how seriously the law takes transparency. Even the possibility of having a criminal record or being involved in public court proceedings can cause lasting damage, both personally and to your brand.

4. Business risks

If your company appears non-compliant, investors, banks, and partners may be hesitant to work with you. Companies House makes PSC and RLE information public, so inaccuracies can damage your business reputation. It only takes one red flag for stakeholders to think twice, and trust is one of the most difficult things to rebuild once it has been lost. Non-compliance also makes your business look disorganised and vulnerable, which opens the doors to risks, including scams that target company owners.

How PSC02 fits into your compliance duties

Filing your PSC02 form doesn’t happen in isolation. All of these Companies House documents and forms are part of a bigger compliance picture. Every UK company must keep all of their registers updated. That means directors, members, PSCs, as well as your annual confirmation statement. If you skip one piece of the puzzle, all other parts can be compromised. This is exactly why many businesses choose to work with accountants to stay on top of deadlines.

Note: Even if you submit PSC02 during the year, you’ll need to confirm those changes in your annual confirmation statement (CS01 form).

How to complete the PSC02 form

Now that you understand the importance of the form and what is at stake if you overlook it, you may feel a bit intimidated. Don’t worry - the form itself is rather straightforward. For even more peace of mind, let’s break it down part by part so you know exactly what to expect.

1. Company information - Fill in your company’s name and number to link the form to your specific business.

2. RLE details - Provide the RLE’s name, its registered or principal office address, legal form, governing law, and registration number.

3. Nature of control - You’ll need to tick the boxes that show how the RLE controls your company (shares, voting rights, right to appoint/remove directors, or significant influence).

4. Signature - The document must be signed by a director, company secretary, or someone authorised to act on behalf of the company.

5. Filing - You can file the completed form online via the Companies House webfiling service or post it by mail. Once the update has been processed, you’ll get confirmation that the process is complete.

How much time do I have to file PSC02?

Once you know that a regal entity has gained significant control, you must update your internal company register within 14 days. After that, you have another 14 days to notify Companies House using the PSC02 form.

That adds up to 28 days from the date of the change to get everything in order. If you miss this window, you put yourself at risk of Companies House penalties.

Common mistakes to avoid

Even though filing forms for Companies House probably isn’t anyone’s idea of fun, it’s important to take your time to do it properly. Avoiding mistakes can save you from headaches later down the line. Being aware of the common mistakes can help you navigate the process more easily.

• Putting in incorrect information - triple check names, registration numbers, addresses and spelling. Even the smallest typos can cause issues when filing the form.
• Leaving gaps - If you don’t list all of the details for an RLE, your filing can be rejected. Make sure you fill out everything that’s required.
• Mixing up forms - There are 9 different PSC forms, but only PSC02 is for adding a new relevant legal entity.
• Missing deadlines - Don’t delay and act quickly to avoid penalties and fines.

How can ANNA help me?

Staying on top of PSC and RLE filings is much easier when you have the right support. Here’s how ANNA (Absolutely No Nonsense Admin) can make compliance and bookkeeping stress-free:

🏢Set up your company: From registering your company to getting a virtual office address, ANNA makes your startup journey seamless.

📝Company secretary service: ANNA’s built-in secretary helps you manage your PSC filings, confirmation statements, and other Companies House updates without any confusion.

🔒Identity verification: With ANNA’s free identity checker, you can meet the new Companies House rules securely and quickly.

💳Smart business account: Open your business account that tracks expenses, automates bookkeeping, and issues invoices on the fly.

📊 Simplify your taxes: ANNA+Taxes calculates and files VAT, Corporation Tax and PAYE straight to HMRC. No nonsense guaranteed.

📞24/7 customer support: ANNA’s team of professionals can answer all your questions at any time of day (or night).

Stay on top of your PSC and RLE obligations effortlessly with ANNA, and keep your company compliant and penalty-free.

FAQ

Which companies must maintain a PSC register?

Almost all UK private companies, LLPs, and some other entities. Public companies with shares admitted to regulated markets might have some exemptions.

Does a PSC register replace other company registers?

No. You still need to maintain a register of directors, members, shareholders, and other relevant parties. The PSC register is specifically about the control and ownership.

Do I have to file a PSC02 if an individual becomes a PSC?

No. PSC02 is only for adding a legal entity. For individuals, use PSC01.

Can I file the form myself, or do I need an accountant?

You can file it yourself. But if you want to do it through your accountant or company secretary, they can also handle it for you.

What are the different PSC forms for?

What’s the difference between PSC02 and PSC05?

PSC02 is used to add an RLE, while PSC05 is used to update details of an existing RLE.

What happens if nobody qualifies as a PSC or RLE?

If, after proper consideration, your company has no PSCs or RLEs, you still must record a statement in your PSC register that “the company knows or has reasonable cause to believe that there is no registrable person or registrable relevant legal entity in relation to the company”.

How long must I keep past PSC records once an RLE stops being a PSC?

You must retain your PSC records for ten years after your PSC is gone from the company. Companies House may hold or publish some data for legal and public record purposes.