Layman guide to confirmation statement and persons of significant control for micro companies

The Companies House “annual return” is no more.  Instead we have the “confirmation statement”.  In many ways it’s similar to what it replaced…so what’s changed?

Persons of significant control (PSC)

There’s lots of big sentences with long words which make this sound much harder than it actually is.  Oversimplifying a little, a PSC is anyone with >25% share ownership in your company.

First thing to say – shareholders aren’t always humans.  I mention this as it’s largely why this section looks complicated.  Shareholders can be either a human being, a corporate body (eg Ltd Co) or what’s known as a “legal person”.  For your typical micro business, it’ll be the first option, “a person with significant control”.

Adding a PSC

We’re adding our first person.  There are quite a few basic details requested.  There is an option to protect the identity of PSCs from the public record.  Reality is the vast majority of business owners won’t be able to do this.

It then asks for your date of birth.  As with details for directors, only the month and year will be publicly available (to go some way towards making life harder for potential ID fraudsters).  It also requests Nationality.

Correspondence address – this will be publicly available.  If you’re concerned about data privacy, you may want to make this somewhere other than your home address.  Having said that, the majority of small Ltd Co owners will use their home address for this.

Home address – your actual home address is separately requested.  This won’t be publicly available.  Your country of residence will be publicly available.

Nature of control

This is where again it can look more complicated than it really is.

Ownership of shares –> The person holds shares, then choose relevant %.  Note that if the person owns exactly 25%, 50%, or 75% they fit into the lower category (ie 50% exactly is “more than 25% but not more than 50% shares”, it’s not “more than 50% but not more than 75% of shares”).

Ownership of voting rights –> The person holds voting rights.  Unless you’ve got a fancy share structure where only some shares hold voting rights (wouldn’t recommend this for a simple micro company) then this will exactly mirror the shares.

Right to appoint or remove the majority of the board of directors.  As suggested earlier assuming it’s a human shareholder, the 2nd and 3rd options aren’t relevant.  It’s just whether the 1st is true or not.  In practice anyone controlling the company (ie >50% shares) can appoint or remove directors.  For micro companies the directors and shareholders are likely to be the same people (or spouses/similar), so this is more a technicality to put on the form rather than something you need to be concerned about.

Has significant influence or control.  (updated 24 Nov 2016) it seems if any of the above boxes have been ticked, this now needs to be left blank.  If you do tick the top option whilst also confirming that the individual holds shares/voting rights etc, the Cos Hse form seems to give an error message.  Simply leave this one blank.  We think it’s only relevant if none of the above more specific reasons apply.

When did this person become a PSC?

Logic might suggest it would either be the date of incorporation, or if it’s someone who only received shares later than that date, the date they went over 25% share ownership.  However, the form will only accept a date on/after 6 April 2016.

I’d therefore suggest you choose 6 April 2016, unless you only obtained your shares after that date.

Rest of form

After that, the rest of the confirmation statement is no different to the annual return.  Check the registered office address is still valid and shareholders match, but otherwise typically just a case of clicking confirm/next half a dozen times then paying a £13 fee to Companies House.

Unpaid share capital – something that confuses a few people. Just enter £0 here, on the basis you will have paid for your share (if not physically putting the £1 or £100 in, it’ll likely have been dealt with via director loan account.

Shortened deadline

Oh…and whilst you had 28 days to file the annual return, you have just 14 days to file the confirmation statement.  Having said that, there was no financial penalty for late filing of an annual return, and the same seems to be true for the confirmation statement.  As with the annual return though, if left too long Companies House will start threatening striking off action.

96 thoughts on “Layman guide to confirmation statement and persons of significant control for micro companies”

  1. On the reminders: “It is also a criminal offence not to file a confirmation statement within 14 days of the end of the review period. If prosecuted, officers may face an unlimited fine.”

    Call me cynical, but the above combined with the 14 day period could be a great way for them to clean all the cash out of your company for anyone not paying attention or away on holiday.

    1. From your experience, do you know anyone who has been prosecuted for not filing the confirmation statement. According to company house, there is no financial charges for not filing it..

  2. Well…to date we’ve never seen a client get fined for a late annual return or confirmation statement.

    Annual accounts – yes, strict financial penalties if those are late, levied on the company.

    Annual return – if left too long Companies House would start striking off proceedings.

    Confirmation statement – at this stage, too early for us to know. However I’d recommend leaving for someone else to test it 😉

    1. Will you get fined for not filing it at all?
      Have you heard any companies who got prosecuted as a result after the company got struck off?

      1. We’ve not experienced anyone being fined or prosecuted…but of course that’s no guarantee it’ll never happen. Companies will be struck off the register if confirmation statement left undone for too long. If you’re in a situation where you want the company struck off, we’d still recommend filing this then also filing a DS01 so to do it properly.

  3. A deadline of 14 days is unfair and ridiculous.

    Threats of criminal prosecution and unlimited fines is typical of the way government organisations think and operate. If the government owes you money, they can take months to repay it.
    It’s a similar situation with TV license payments.

    In my case, my company ceased trading at the end of July 2016. I can’t apply for strike off until the bank account has been closed. I can’t close the bank account until the final Corporation Tax refund has been received from HMRC. That means I am forced to submit (and pay for) a Confirmation Statement for 2016-2017 even though the company is no longer trading.

  4. Thanks for addressing “When did this person become a PSC?”, as 6 April 2016. I guess no PSCs existed until they were invented this tax year!

  5. Thanks so much for this had no idea what it was on about. This is my first year running my own business and have been learning of the fly a bit. If anyone has any good links like this site for layman’s terms for tax, accounts etc would be really appreciated.

  6. Great article, thanks. Our company has 4 shareholders each with 25% of shares – can any of us be a PSC? Two of the shareholders are Director and Company Secretary – could it be one of these?

    1. Good question. Share-wise looks like the lowest category is “more than 25% but not more than 50% of shares”. 25% precisely is therefore not “more than 25%”, so would fall under that category. However, it also says “At least one PSC notification must be provided to proceed”.

      From a practical perspective, is there one person (possibly the director) who acts as if they have control? The guidance talks about “has the right to, or actually exercises significant influence or control”. Therefore if 1-3 of the shareholders realistically take a back seat, they can probably be left off, whilst the other(s) are added.

      If you want to be safe from any potential come back, I’d suggest calling Companies House, see what they say.

  7. Found this blog post on a forum (Contractor UK) while trying to find out what “A total aggregate amount unpaid” is in English. Thanks for your help, very much appreciated.

  8. Thanks for the confirmation of the date when you became a PSC, quite why they don’t explain this on the form I’ll never know.

  9. Thanks for a clear and concise post which swiftly dealt with my own queries that cropped up whilst trying to complete the PSC notification today – I’ve been trawling the web for this info but found nothing so helpful until now. The .gov website and indeed Companies House own guidance are somewhat lacking in the kind of detail that’s invaluable for do-it-yourself types like me. Really glad I found your blog and will bookmark it.

  10. So, if I am the sole Director of a limited company with not employees etc… do I need to declare myself as a PSC. Or the only Director of the company does not need to. thus in this case you can choose the option for no statement of PSC.

    A.

  11. Thanks for the post. I’m getting confused over issued and non-issued shares. I set my micro-entity up with the possibility to issue 50 of £1 shares, but only carry in my shareholders funds £1 as issued and paid up, by me, as the sole Director of the company. Does that mean I own 100% of the “shares” – ie issued – or only 2% ?
    Seems to me, I should be the (only) PSC, but the companies house video on youtube doesn’t make it explicitly clear.

    1. Sounds like you may be thinking of “issued” vs “authorised” share capital. My understanding is the concept of authorised share capital died a death (at least in the UK) a few years ago now.

      If there’s only one share issued, and you’ve got it, then you own 100% and hence would be a PSC.

  12. Excellent and very helpful indeed! We had just settled down with a cup of tea to knock off the Annual Return (expecting 5 mins and £13 gone as usual) when we hit this PSC stuff. Your guide was brilliant. We did find that putting a £ sign on 0 for the unpaid share capital was rejected but a simple 0 on its own worked. Many thanks.

  13. Thanks for your Laymen’s Guide blog Chris … appreciate you taking the time to help us out in a clear and concise way 🙂

  14. I wrestled with the fact that me and Mrs Chiny jointly own 100% of the company shares… OK, on this form I decided that must be 50% each.

    I have been fined twice (once £100, once £150) for missing the filing deadline. The first time was on taking over the company from a confused person, the second time because the Royal Mail failed on “guaranteed next day delivery (took 9 days). So, CoHo do have an extra income source.

  15. This is a great article and helps some!

    If I am a sole director, do I have the right to appoint or remove the boeard of directors? Um, there are none??

    And, if I am sole director, with more than 75% shares, presumably I actually have significant influence or control??

    Why do they make it so confusing!

    1. Yes. You could appoint another director.

      Re you also having significant influence and control, if by that you mean the final option, I believe assuming you meet one of the more specific reasons for having control you can ignore that one. Ie I believe it’s for people who aren’t significant shareholders but still for some other reason have significant control.

  16. Hiya! Presumably if you tick it, it makes no difference then? As you are reiterating what you have already said? (I did mine already, and am now panicking I did it wrong, I tick all 4 boxes!)
    I wish I had found this thread last week, its been playing on my mind.

  17. Thank’s Chris. Your post begs the question why Companies House itself cannot write a guide that is so simple and easy to follow.

  18. Thank you for this guide.
    Quite often it’s simply a matter of confirmation of what you already thought anyway. Small business people don’t have the luxury of a sounding post in the office, or the time to deal with the unnecessary ambiguity built in to government departmental systems. They could learn a lot from reading this.

  19. Why is webfiling asking us to complete at least one PSC when no shareholder, except the director has more than 20% of shares? Does this mean that the director who owns 80% is the PSC they want filed

  20. Firstly, thank you to whoever (Chris Maslin ?) compiled and posted this guide – found it while searching, like many others, for some clarity while filling in my Annual Return/Confirmation Statement.

    Secondly, for a one person limited company (one director who is also the only employee) why does everything have to get SO complicated ? We’re constantly told about ‘The Gig Economy’, that more and more people are in one form or self-employment or another (okay, not strictly ‘self-employment’…..but it is…), the Government wants everyone to be working (and paying tax), but then makes the processes as similar for one person at a dining room table as it would be if he/she were Big Corp International. Transparency is all very well, but in many cases is it really relevant ?

    1. I do wonder why when Companies House have details of directors and shareholders that for the simplest companies (ie 1 director who’s also 100% shareholder) they can’t auto complete the PSC section. Does just seem to be lots of repetitive typing in the same data. Sadly I don’t make the rules, am just trying to help people comply with them 🙂

  21. Thanks for this. I only stumbled across it by accident but it was so helpful. Now that I’ve completed the PSC section, do I also have to send paper copies of the Notice of Individual Person with Significant Control to Companies House?

  22. Hi Chris
    Thanks for this information, I have been struggling with this and if I need to add myself as a PSC if I am the only person in my ltd company and therefore am a sole director. (I am not alone) According to the guidance notes here: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/523120/PSC_statutory_guidance_companies.pdf
    Section 1.15 refers to Section 4.6 and roles which would not constitute a PSC. It would appear that as a Sole Director which I am I would not be classified as a PSC. Please can you let me know your view on this.
    Thanks
    David

    1. Hmmm…I think key bit from 4.1 “…which would not, on their own, result…” means that 4.6 is referring to a situation where there was a sole director who held no shares. In that situation the sole director would not be a PSC (the shareholder(s) would be). However, in most situations a sole director would also be a majority shareholder, hence they’d be a PSC due to that.

      1. Hmmm…. I now agree with you after re-reading. I am the PSC despite being the only person in the company. I was interpreting 4.6 incorrectly. Many, many thanks for pointing out the fact in 4.1 “on their own, result”

        All the best
        David

  23. Hi

    If there are 2 directors with 50% shares each but only one of them is a PSC does this cause a problem to the non PSC share holder?

  24. Two equal shareholders but only one has voting rights, do they both have to be a PSC or can just the shareholder with voting rights? I thought if they met the criteria that they HAD to be but am now doubting myself. CH unable to help and suggested I obtain legal advice!

    1. I’d suggest both have significant control for this purpose, despite one not having any voting rights. You’ll perhaps have seen the different ways someone can achieve “significant control” in Companies House’s view, and the voting option is independent of share ownership.

      1. Great, I have been correct in the past, that’s reassuring. I was disappointed that Companies House were unable to assist at all.

  25. Hi

    I live in a shared freehold which comprises of two flats.

    One flat has one owner and my flat has three joint owners (brother and sister and myself)

    I am listed as a director and so is the other owner of the flat.

    Do I need to list all four of us as PSC’s? Can I list just two of us and the other flat owner?

    Currently I only list myself as a director and the other flat owner as a director is this ok? Do I need to list my brother/sister as a director /secretary?

    Appreciate your help.

    Also found the above page very useful so thank you!

    1. Who’s the shareholder(s) of the company related to your flat? Is it just you? If so, I’d suggest you and the other flat owner are the only 2 PSCs. Anyone owning >25% of the company is a PSC.

  26. Good evening,
    You probably mentioned it before.
    I am a director in my own limited company. Am I the PSCs?

    1. Yes. It’s listing the person/people who has/have significant control. If you sell your stake in the company, it’s highly likely you won’t control it anymore, the new owner would.

  27. Hi Chris

    Just what I was looking for layman’s guide, but still struggling submitting our 1st confirmation statement. We are 2 directors with 1 ordinary share @ 1.00 GBP each. We had put there were no changes, but it was rejected for not putting the total aggregate amount ???
    Thanks in advance

    1. It’s total aggregate amount unpaid it’s looking for. We’d tend to suggest putting £0 on the basis you’ve paid for your shares. Unpaid shares are a bit redundant. Even if you haven’t physically put the 2 x £1 in, presumably the amounts are then sitting in your director loan accounts.

  28. Hi

    We are part of a large group, we have 2 directors, one based abroad, no shares, or voting rights etc for either, its the definition of significant control I am struggling with, other director is a traditional MD of the company, who reports into the Group, he has control over normal day to day operations of our UK plant as normal, but I can’t get explanation what is actually significant ? as in theory wouldn’t every MD have significant control ? and as such need identifying as a PSC

    1. This blog is only geared towards 1-2 person owner managed companies. I’d suggest if you’ve got a group then you should liaise with the accountants for it.

  29. Really useful blog which I wish I saw before filing my confirmation statement. I got the aggregate item mixed up – I now think it should be 0. Do I need to refile? Does it matter to anyone if it’s a dormant account anyway?

    1. Being honest it’s highly unlikely to cause you any issues given the far more cringeworthy mistakes we see in these/accounts quite often that get through!

  30. This is a great help – thank you!

    I’ve filed my retrun, but it seems I’ve misunderstood the PSC thing – I’d understood it was anyone with influence OTHER than me. As the owner, sole director and sole shareholder OR COURSE I have 100% influence over the company, but I AM the company, and no-one else is influencing me 🙂

    Ho hum. I’ll check with my accountant for next time and plead ignorance if Companies House chase me for it.

  31. Hi Chris,
    what happens if no-one has more than 25%.
    I read there was a way to state this and not declare any PSCs in the register.
    Do you have any info on this.
    Many thanks

    1. Hi Harry,
      I don’t know off the top of my head, highly unlikely to apply to any of our clients.
      I imagine in practice unless it’s Tesco/similar with thousands of shareholders and the big ones are mostly pension schemes, there will normally be at least one person who clearly has some kind of control of the company. Therefore it may be that they don’t meet the shareholding/voting rights bit, but you’ll perhaps note further down there is a more generic “has significant influence or control” option. If you have 8 shareholders with 10% and the 9th shareholder is sole director and also has 20%, I’d suggest they’re the PSC.

  32. Thanks for going to the trouble of writing this Chris and for sharing it. Answered all the queries I had. If only Companies House could be this straightforward.

  33. I am a 20% shareholder in a business that has filed a confirmation statement but I do not appear. It is listed under the name of another party, the party to whom I have signed over my rights to but not the shares as they are buying them over 5 years. I am not sure how they should be shown, listed by the owner of the rights or the owner of the shares?

    1. Typically only those with >25% of shares would appear as “PSC”s.

      Potentially there could be shareholders with <25% who therefore wouldn't appear. I'd suggest discussing with the company's accountant. Or, if you feel you are being illegally squeezed out, then it would be one for a solicitor (but be prepared to pay more than a few quid if you go down that route).

  34. we have noted that three of our directors have now become p.s.c and the rest of us did not know anything about it. Each owner of the flats has the same 3 shares, so what can we do please.

    1. My non professional opinion would be “so what”! Being a PSC doesn’t entitle them to anything extra.

      If it concerns you, I’d suggest discussing with one of the directors. If you feel particularly aggrieved then you may wish to seek formal legal advice (if anything it’s a legal issue, not an accounting one)…but unless there’s something else to the story, I think you’re worrying about nothing.

  35. I resigned as a Director of a Limited company that I still own 33% shares in. I notice on Companies House that I have been removed as a PSC… I did not do this… the remaining 2 Directors must have. Is this legal? Can I prosecute them?

    1. This would be more a legal than accounting thing…but as with a recent comment to another person, my first thought is “so what?” Assuming they’re still agreeing that you own 33%, you’re not really suffering any hardship from not being shown as a PSC.

          1. I don’t know, you’re into legal territory there (I’m just an accountant). Key thing I’m saying is the PSC in itself doesn’t really mean anything. Assuming they still accept you have whatever shareholding, I wouldn’t worry about it. If they’re attempting to argue you no longer have those shares/they’ve been diluted for some reason, then you should potentially seek legal advice, as it could lead to you losing out financially.

  36. I am a 50% sharehlder in a company, I was also a director until 3 weeks ago as the other director/shareholder offered to buy me out, we agreed an amount and once I had resigned he would complete the transfer. BUT he did not and breached the agreement, my question is, can I be reappointed as a director because the agreement has colapsed? He rejected my request to be reappointed as a director.

  37. I resigned from my Limited co and the 2 remaining Directors (it was acrimonious) removed me as PSC without my knowledge or agreement. I am still a shareholder (33% and the Articles of Association are tight). I have now added myself back on. Could be a game of ping pong as Companies House accept paperwork ‘in good faith’. If they remove me again, I will have no option but to persue court action. Seems a pretty loose control….

  38. If the only director of the company has been removed -and replaced – but is still listed as the psc – should it be filled for removal also ? They are listed as a shareholder but 1% this is a very new start up company and we want to get everything right to build a solid foundation. The new director will be the shareholder or majority shareholder at least.

    Thank you for your time

    1. If that person is no longer a director and only hold 1%, then it’s likely that they’re not a person of significant control. Sounds like the new director and majority shareholder will be.

  39. Hi We are a residential management company of 14 shareholders (14 flats), all with an equal share of the freehold. There are 5 directors on the Board and one of them has registered him/herself as a PSC but they did not register the other 4 Directors as such. Should all Board Directors be registered as PSC too just for the record? It sounds as though it doesn’t really matter as this doesn’t change the articles of association or voting rights etc. But for completeness would this be the right thing to do?

    1. I would guess possibly yours is one where you could get away with saying there is no PSC. From what you’ve said, the largest shareholding is ~7% (so way below 25%). I wouldn’t be concerned, there’s no perks to being a PSC!

  40. We have 5 people with 20% shares each but only two are listed as a psc, stating they have more than 25%. Please could you explain this to me.

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