TL;DR
When a company owns more than 25% of another company, it's called an RLE (Relevant Legal Entity). But Companies House wants to know the real people in charge – so you trace up the chain until you find humans. Those people need to verify.
Corporate PSCs & RLEs
When Companies Own Companies
Sometimes a company (not a person) owns or controls another company. This is common in:
- Group structures (parent and subsidiary companies)
- Investment vehicles and holding companies
- Joint ventures between companies
When a company has significant control over another company, it's called a Relevant Legal Entity (RLE).
Example: Tracing the Chain
Sarah Smith
Real person – owns 100%
Must verify identity
Smith Holdings Ltd
Owns 100% of operating company
This is an RLE
Smith Consulting Ltd
The operating company
Needs to know its PSCs
In this example: Smith Consulting Ltd must register Smith Holdings Ltd as an RLE. But the real PSC is Sarah Smith – because she controls the holding company. Sarah must verify her identity.
What You Need to Do
Register the RLE
If a company controls your company, register it as an RLE at Companies House. This shows the corporate structure.
Identify the real people
Trace up the chain of ownership until you find the humans who ultimately control things. These are your "registrable" PSCs.
Those people verify their identity
The real people at the top of the chain must verify their identity through an ACSP like TaxStats ID.
When is a Company an RLE?
A company is an RLE if it meets the PSC conditions:
- Owns more than 25% of shares in another company
- Has more than 25% of voting rights
- Can appoint or remove directors
- Has significant influence or control
Plus the company must be a "relevant legal entity" – essentially, it needs to be on a regulated stock exchange or subject to disclosure requirements in certain jurisdictions.
Companies Can't Verify – People Must
An RLE doesn't verify its identity – companies can't show ID! The verification requirement applies to the real people who control the RLE.
If you're a director or PSC of a company that controls other companies, you need to verify your identity.
Common Questions
What's the difference between an RLE and a PSC?
A PSC is always a person. An RLE (Relevant Legal Entity) is a company that controls another company. RLEs are registered, but you still need to find and verify the real people who control the RLE.
Does the RLE itself need to verify?
No – companies can't verify their identity. But the people who are PSCs or directors of the RLE must verify their identities.
What if there's a chain of companies?
You trace back until you find the real people. Someone, somewhere, is a human being who controls the chain – and they need to verify.
What if the controlling company is overseas?
The same rules apply. You need to identify and verify the real people who control the overseas company. They can verify digitally from anywhere in the world.
Got a Complex Structure?
If you have a multi-layered corporate structure and aren't sure who needs to verify, we can help you work it out.
Call us: 0161 317 8556Need to Verify?
If you control companies through corporate structures, verify your identity today.
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