Aipedia: Company formation and secretarial agents

AI and PSC register mistakes

Aipedia, by the Apex broking team · Last reviewed 2026-10-30

AI can read ownership charts and suggest who counts as a person with significant control, but the agent remains responsible for what it files. A missed PSC or wrong nature of control puts the client's public record wrong and can expose the company and its officers to offences.

Part of: AI in Company formation and secretarial agents

In short

Identifying people with significant control (PSCs) means working through shareholdings, voting rights, appointment rights, trusts and chains of companies. AI tools can parse group structures and propose PSCs and nature-of-control statements, but errors are common where control is indirect, shared or held through trusts. Since 18 November 2025, PSCs must also verify their identity with Companies House. A wrong entry becomes part of the client's public record and needs correcting, and the client may face offences. The agent owes reasonable care and skill, and PI usually responds to the client's claim, subject to the wording.

How agents use AI to identify PSCs

Formation agents and company secretaries file PSC information at incorporation and keep it up to date. For a simple company with individual shareholders, the answer is usually obvious. For groups with holding companies, overseas entities, trusts, partnerships or shareholder agreements that confer control, it is not. AI tools are used to read structure charts, registers and constitutional documents and to suggest which individuals or legal entities meet the conditions, along with the nature of control to record.

The output is only as good as the documents provided and the logic applied. A tool that reads share percentages may miss control exercised through voting agreements, appointment rights or significant influence.

The duties that apply

Several requirements meet in this task. The main ones are these:

Accuracy: errors in AI-drafted PSC details become the client's public record and may need rectification.
Identity verification: since 18 November 2025, identity verification has been a legal requirement for PSCs as well as directors and LLP members. Each verified PSC receives a personal code, so a wrongly identified PSC creates a further mismatch.
AML: as a TCSP under the Money Laundering Regulations 2017, the agent must understand beneficial ownership as part of customer due diligence, which overlaps with PSC analysis.
Care and skill: section 13 of the Supply of Goods and Services Act 1982 applies to services for business clients.

Failure to verify identity is an offence that can lead to a financial penalty and blocked filings, and inaccurate PSC information can create separate problems for the company and its officers.

The regulatory background, including the ACSP regime, is summarised in the company formation agents overview.

What can go wrong

Illustrative scenario: an agent uploads a group structure chart to an AI tool to prepare PSC filings for a new subsidiary. The tool identifies the parent company as a registrable legal entity but misreads a footnote showing that one individual holds a majority of the voting rights through a separate class of shares. The individual is never recorded or verified as a PSC. The omission surfaces when a bank compares its own ownership checks with the register, pauses an account opening and asks the company to explain.

Other errors include recording the wrong nature-of-control band, treating joint holders as separate, missing trusts or firms with control and failing to update the register when the structure changes. AI client risk tools that rely on the same analysis can repeat the mistake; see AI client risk scoring for TCSPs.

How PI usually responds

A client company that suffers cost or loss from a wrong PSC filing, such as legal fees to correct the record or a delayed transaction, may claim against the agent. PI commonly responds, subject to the policy terms. Whether a client could recover a fine or penalty imposed on it from the agent is doubtful, and policies commonly exclude fines in any case. The same AI error repeated across a client book could raise aggregation questions. See PI for company secretaries and corporate services and does formation agents' PI cover AI errors?.

Practical controls

These steps help keep AI-assisted PSC analysis accurate:

Ask for the full share register, articles and any shareholder agreement, not just a chart.
Check each condition, including voting rights, appointment rights and significant influence, rather than share percentages alone.
Have a qualified person sign off every complex or multi-layered structure.
Reconcile PSC entries with identity verification records and personal codes.
Diary a PSC review whenever shares are issued or transferred; see AI for share allotments.
Keep unpublished structure charts out of public AI tools.

How Apex helps

Apex arranges PI for corporate service providers that maintain PSC registers. A broker checks that statutory register work is within your declared services and how the policy treats repeated errors from one AI process.

Sources

Frequently asked

Can AI decide who is a PSC?

It can suggest, but the agent and the company are responsible for the filing. AI tools often focus on share percentages and can miss control through voting rights, appointment rights, trusts or significant influence, so a qualified person should review complex structures.

Do PSCs have to verify their identity?

Yes. Identity verification became a legal requirement for PSCs, directors and LLP members on 18 November 2025, with a 12-month transition for existing people. A verified person receives an 11-character personal code to give Companies House for each role.

Will PI pay a penalty imposed on the client for a wrong PSC entry?

Usually not. Policies commonly exclude fines and penalties, and some are uninsurable. The client's other losses, such as the cost of correcting the record or a delayed deal, may be claimed against the agent and could fall within PI.

Check your PI covers how you use AI

Tell us about your firm and the work you do. A broker will review how your current PI treats AI-assisted work, or arrange new cover. No fee for a quote. Or call 0117 325 0027.

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Apex Insurance Brokers Limited is authorised and regulated by the Financial Conduct Authority. Registered in England and Wales, company number 07014570. This page is general information about how AI is used in the profession and how insurance may respond. It is not legal, regulatory or insurance advice on your circumstances, and it does not guarantee that cover will be available or on what terms.