A new corporate client approaches your practice. Growing trading company, reasonable fees, straightforward compliance.
You accept the engagement and begin onboarding.
That’s when PSC verification starts. Identify Persons with Significant Control, verify identities, conduct AML checks, complete KYC procedures, document everything properly.
Questions pile up fast. Who qualifies as a PSC? How do you verify beneficial owners who aren’t directors? What happens when ownership is held through another company? Do you need separate AML checks for each one?
The requirements feel overwhelming because they’re interconnected across multiple regulations. Companies House registration, AML obligations, identity verification rules, beneficial ownership transparency.
This guide answers every question: what PSCs are, how to identify them, what verification is required, and when ownership structures should concern you.
Understanding People with Significant Control (PSCs)
A Person with Significant Control (PSC) is an individual who owns or controls a company, either directly or indirectly. The UK government introduced the Companies House PSC register to improve transparency about who truly owns and controls companies. This makes it harder for individuals to misuse corporate structures for unlawful purposes.
How to Identify PSCs
According to Companies House guidance, a person with significant control (PSC) is someone who meets one or more of the following conditions:
- Holds, directly or indirectly, more than 25% of the company’s shares
- Holds, directly or indirectly, more than 25% of the voting rights
- Has the right, directly or indirectly, to appoint or remove the majority of directors
- Exercises, or has the right to exercise, significant influence or control over the company
- Controls a trust or firm that itself meets one of the above conditions
The first three conditions are numerical and straightforward to measure. The fourth condition captures situations where someone may not meet the percentage thresholds but still effectively controls the company. For example, an individual may have veto rights over key decisions or influence through shareholder agreements.
The fifth condition addresses indirect control. If a trust or another company meets any of the first four conditions, any individual controlling that entity is also considered a person with significant control (PSC). This ensures that control is identified even through corporate layers or complex ownership structures.
Legal Owners vs Beneficial Owners: Identifying Who Really Owns the Company
Once the five conditions are understood, it is important to distinguish between legal ownership, which refers to who is officially listed as a shareholder, and beneficial ownership, which refers to who ultimately enjoys the benefits and control.
For example, in a family-owned business, a husband and wife each own 50% percent of the shares and are both directors. They clearly meet the thresholds and are recorded as PSCs. If the same company is owned by a holding company that is in turn owned by the couple, the ultimate control has not changed. The couple remain the beneficial owners even though the legal ownership appears layered.
This distinction highlights why identifying PSCs requires more than reading the share register following the UK’s approach to beneficial ownership transparency as set out on GOV.UK. It involves understanding the real flow of control through the company’s ownership structure.
What Accountants Should Do About PSCs When Taking on a Company Client
When you take on a new company client, identifying and verifying their PSCs should be one of your first tasks. This forms part of your customer due diligence obligations and helps you understand who you’re really doing business with.
Follow these five steps:
Step 1: Check Companies House & Gather Supporting Documents
Start with the Companies House person with significant control (PSC) register. Every UK company must maintain a PSC register and file this information publicly. This gives you a baseline, but don’t rely solely on what’s recorded there. Companies House publishes information provided by companies but doesn’t verify its accuracy.
Review the company’s register of members, articles of association, and shareholder agreements for additional control details not visible in public filings.
Step 2: Collect Required Information for Each PSC
For every person with significant control, you need:
- Full name, date of birth, nationality, and country of usual residence
- Service address and usual residential address
- Date they became a PSC and which conditions they meet
- Level of shares and voting rights (over 25% up to 50%, more than 50% and less than 75%, or 75% or more)
Step 3: Verify & Compare Against Official Records
Compare the information you’ve gathered against Companies House records. Discrepancies should be discussed with your client and resolved. If Companies House records contain incorrect person with significant control (PSC) information, you have a legal obligation to report this to the registrar.
Step 4: Trace Complex Ownership Structures
When a company is owned by another company, trace through to identify the individuals who ultimately control the structure. If a trust controls the company, trustees may need to be recorded as PSCs.
If person with significant control information is missing or someone refuses to provide it, document your attempts to obtain information and consider whether the engagement is appropriate to accept.
Step 5: Maintain Secure, Retrievable Records
Set up systems to record PSC information securely from day one. Retain PSC records for at least five years after the business relationship ends. These records must be readily retrievable. It’s a legal requirement under the Money Laundering Regulations.
These five steps ensure you meet your legal obligations while protecting your practice from compliance failures. Person with significant control (PSC) verification done systematically becomes routine due diligence rather than complicated investigation.
Accountants Responsibilities Around PSCs for AML Compliance
Person with significant control verification sits at the heart of your anti-money laundering responsibilities. Under the Money Laundering, Terrorist Financing and Transfer of Funds Regulations 2017, you must conduct customer due diligence before entering into a business relationship with a client.
For company clients, identifying and verifying PSCs is fundamental to this process. You need to understand not just what the company does, but who ultimately owns and controls it. This knowledge allows you to assess whether the company might be used for money laundering or terrorist financing.
Standard Customer Due Diligence for PSCs
Standard due diligence requires verifying PSC identity using reliable, independent sources. For individuals, this typically means government-issued photographic identification (passport or driving licence) plus proof of address (recent utility bill or bank statement).
Check these documents carefully to ensure they’re genuine and belong to the person claiming them.
Beyond identity verification, you need to understand the nature and purpose of the business relationship. Why is the company structured this way? Does the ownership structure make commercial sense? Are there features that seem unusual or overly complex?
When Enhanced Due Diligence Becomes Mandatory for PSCs
Standard due diligence isn’t sufficient for all PSCs. Enhanced Due Diligence becomes mandatory when the PSC is a Politically Exposed Person, when the PSC is from a high-risk third country identified by the EU, or when you’re not physically present during the identity verification process.
These situations present higher money laundering risks that require deeper investigation beyond basic identity checks. The enhanced measures ensure you understand not just who the PSC is, but where their wealth comes from and whether the business relationship presents acceptable risk.
What to Do If a PSC Is a Politically Exposed Person
PEPs are individuals who hold or have held prominent public functions: heads of state, senior politicians, senior government officials, high-ranking military officers. Family members and close associates of PEPs also require enhanced scrutiny.
For PSC PEPs, you must:
- Obtain senior management approval for establishing the relationship
- Establish their source of wealth and source of funds (understand not just that they own 30% of your client company, but where the money came from to acquire that stake)
- Conduct enhanced monitoring of the ongoing relationship with more frequent reviews
What to Do If a PSC is From a High-Risk Third Country
When a person with significant control is established in a high-risk third country, enhanced due diligence requires more detailed investigation and ongoing oversight.
You must:
- Obtain additional information on the beneficial owner and the intended nature of the business relationship
- Gather information on the source of funds and source of wealth
- Understand the reasons for transactions
- Obtain senior management approval for establishing or continuing the relationship
- Conduct enhanced monitoring through increased controls and more frequent reviews
Additional Responsibilities for AML Compliance
Beyond verification and enhanced due diligence, accountants have ongoing obligations around person with significant control compliance:
- Maintain all customer due diligence records, including PSC verification documents, for five years after the business relationship ends
- Report discrepancies between the PSC register and actual ownership or control to Companies House (may indicate attempts to conceal beneficial ownership)
- Integrate PSC checks into your firm’s broader AML framework, including risk assessment processes, policies and procedures, and staff training
- Ensure everyone in your firm who deals with company clients understands PSC requirements and knows when to escalate concerns
- Monitor for changes in PSC status throughout the client relationship, not just at onboarding
Meeting these responsibilities protects your practice from regulatory penalties while ensuring you’re not unknowingly facilitating financial crime. PSC verification done properly becomes systematic due diligence that strengthens your compliance position rather than administrative burden that drains resources.
Accountants Role in Companies House ID Verification Requirement for PSCs
From 18 November 2025, identity verification becomes mandatory for company directors and PSCs under reforms announced by Companies House. This represents a significant change in how Companies House operates and creates new responsibilities for accountants, particularly those acting as Authorised Corporate Service Providers.
The New Identity Verification Requirements
Every PSC must now verify their identity with Companies House. They can do this either:
- directly through GOV.UK One Login or
- through an Authorised Corporate Service Provider.
If you act as an ACSP, you take on legal responsibilities for identity verification. You must confirm their full name, date of birth, nationality, and residential address using reliable evidence: government-issued photo identification and proof of address.
You then make a formal declaration to Companies House confirming you have verified the person’s identity in accordance with legal requirements. Companies House accepts this declaration without requiring you to upload the actual documents. However, you must retain all verification documents in your own records because regulators such as HMRC may request to see your audit trail during AML supervision visits.
Overlap With AML Obligations
The identity checks you conduct for AML customer due diligence can often satisfy the identity verification requirements for Companies House, and vice versa.
If you’ve already verified a person with significant control‘s identity as part of your AML checks, that same verification can support your ACSP declaration, provided it meets the required standards and is reasonably current.
Structure your verification process to meet both requirements from the start. Collect the right documents, check them thoroughly, record what you’ve verified and when, and retain clear evidence. This means you verify once but comply twice, saving time and avoiding duplication.
Deadlines for Companies House Identity Verification You Must Be Aware Of
PSCs must meet specific deadlines:
- New PSCs Appointed After 18 November 2025 – Identity verification must be completed before or at the time of appointment.
- Existing PSCs Who Are Also Directors – Deadline aligns with the company’s next confirmation statement.
- Existing PSCs Who Are Not Directors – Deadline based on their month of birth as shown on the Companies House register, with a 14-day period starting from the first day of that month in 2026.
These deadlines matter. It becomes a criminal offence for a director to act without being verified once their deadline has passed. While Companies House has indicated they will take a proportionate approach to enforcement, the legal obligation is clear.
Ensuring your clients meet verification requirements protects both their compliance position and your professional obligations as an ACSP.
Ongoing PSC Monitoring: When & How to Update Checks
Person with significant control compliance isn’t a one-off task you complete at onboarding and then forget. The Money Laundering Regulations require ongoing monitoring of your business relationships, and this includes keeping PSC information current and watching for changes that affect your risk assessment.
When to Review PSCs Immediately
Certain situations require immediate PSC review and action:
- Ownership or Control Changes – When shares are sold, voting rights are transferred, or someone acquires the right to appoint directors, review and update your Person with significant control records. Record these changes in your own register within 14 days of becoming aware of them, then notify Companies House within a further 14 days.
- Personal Detail Changes – When a PSC changes address, nationality, or other recorded details, update your records and report these changes to Companies House within the same 14-day timeframes.
- Service Relationship Changes – When you start providing different services to a company, particularly higher-risk services, review your PSC information as part of reassessing the overall engagement risk. If you’re reactivating a previously stalled engagement, refresh your person with significant control (PSC) checks before proceeding.
- Information Contradictions – When you discover transactions inconsistent with your understanding of the ownership structure or business relationships that don’t align with recorded PSCs, investigate immediately. These inconsistencies may require enhanced due diligence.
- PEP Involvement – When you discover a person with significant control has become politically exposed or a new PSC is a PEP, escalate your risk assessment immediately and apply enhanced due diligence requirements.
- Business Activity Changes – When the company starts operating in new countries or enters new sectors, review PSC information to assess whether these changes affect your risk profile.
Scheduling Periodic Reviews of PSCs Based on Risk
Beyond immediate triggers, schedule regular person with significant control reviews based on your client risk rating:
- Low-Risk Clients – Schedule annual reviews. Confirm person with significant control (PSC) information remains accurate, ownership structure hasn’t changed, and nothing has emerged that alters your risk assessment.
- Standard-Risk Clients – Schedule annual reviews with the same verification focus.
- High-Risk Clients – Schedule quarterly or semi-annual reviews. This includes clients with PEP involvement, complex ownership structures, or operations in high-risk jurisdictions.
Your periodic reviews don’t require repeating full identity verification each time. Focus on confirming accuracy, checking for structural changes, and identifying any new risk factors.
Periodic reviews do not require full identity verification each time. Focus on accuracy, structural changes, and new risk factors.
Document every review, including when it was done, what was checked, findings, and any actions taken. Integrate PSC verification into regular client review cycles, such as engagement letter updates or annual compliance checks.
Common PSC Scenarios & How Accountants Can Handle Them
Understanding how person with significant control rules apply in real situations helps you identify and record PSCs correctly. Here are common scenarios you’re likely to encounter and what to do in each situation.
When to Seek Legal Advice
Seek legal advice in these situations:
- Unsure whether someone meets the significant influence or control condition
- Trust arrangement is particularly complicated
- Dealing with unusual corporate structures
- Ownership arrangements seem designed to obscure beneficial ownership
Professional advice prevents costly mistakes and ensures you meet compliance obligations correctly.
Spotting Red Flags: What Accountants Should Watch for When Dealing with PSCs
Certain patterns in person with significant control disclosure should alert you to potential risks and prompt closer scrutiny.
- Discrepancies or reluctance to disclose often signal problems. If the PSCs listed by the client differ from Companies House records, ownership percentages do not match, or the client delays, claims ignorance, or refuses to provide information, it may indicate a lack of transparency or awareness of legal obligations
- Unnecessarily complex structures are another warning sign. Small companies with multiple ownership layers across jurisdictions without a clear business purpose should be questioned. Nominee arrangements that lack legitimate explanation may also obscure who truly benefits from ownership
- Undisclosed politically exposed persons (PEPs) require immediate attention. If you discover PEP status through your own checks rather than client disclosure, determine whether it was an oversight or an attempt to avoid enhanced scrutiny, as this affects your due diligence obligations
- Ownership through high-risk jurisdictions indicates elevated risk. PSCs based in countries with weak anti-money laundering controls, banking secrecy, or corruption do not automatically suggest wrongdoing, but they require more detailed checks on source of wealth and closer monitoring of the relationship
- Frequent or unexplained changes in PSCs or control arrangements can also be concerning. If ownership rotates regularly, arrangements shift without clear business reasons, or stated business activities do not align with the ownership structure, these patterns may indicate attempts to obscure true control
These red flags do not necessarily imply misconduct but should trigger enhanced scrutiny, careful documentation, and in some cases, a decision to decline the engagement. Protecting your professional reputation and ensuring compliance should always take priority over any single client fee.
Conclusion
Understanding PSCs means knowing who really owns and controls your company clients, not just what appears on paper.
This knowledge protects you from unknowingly facilitating financial crime while meeting your legal obligations under Companies House registration, AML regulations, and identity verification requirements.
So, don’t wait. Every delay in establishing proper PSC controls risks regulatory fines or prosecution. Build systematic processes now that capture all five control conditions, trace beneficial ownership through complex structures, and recognize warning signs requiring enhanced scrutiny.
Person with significant control verification done properly becomes routine due diligence that protects your practice from compliance failures while meeting your professional obligations.
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