Consultation launched into corporate transparency and reform of the Companies RegisterPrint publication
On 5 May 2019 the Department for Business, Energy and Industrial Strategy published a consultation on proposals to increase the transparency of UK corporate entities and to enhance the role of Companies House. The potential reforms would amount to the biggest changes to the UK system for setting up and operating companies since the UK Company Register was created in 1844.
On 5 May 2019 the Department for Business, Energy and Industrial Strategy (BEIS) published a consultation on proposals to increase the transparency of UK corporate entities and to enhance the role of Companies House. The proposed reforms aim to improve the accuracy of information on the Companies Register and to strengthen the UK’s ability to combat economic crime. The consultation explores whether more information should be required about the people registering, running and owning companies and other limited liability entities, as well as the entities themselves. The consultation also puts forward ideas for improved checks on that information, including reform of the statutory powers of the Registrar of Companies.
The proposals fall into five parts:
- Part A: Knowing who is setting up, managing and controlling corporate entities. Government proposes that individuals who have a key role in companies should have their identity verified. This would apply to company officers, people with significant control (PSCs) and those filing information. Government also considers whether more information should be disclosed about shareholders, including possible identity verification.
- Part B: Improving the accuracy and usability of data on the Companies Register. This part of the consultation sets out a series of proposed reforms that would deliver better quality information on the register. These include extending the powers of Companies House to query and seek corroboration on information before it is entered on the register and to make it easier to remove inaccurate information from the register. In addition, Government is proposing improvements to the process and delivery of annual accounts to Companies House.
- Part C:Protecting personal information. In this part Government outlines how Companies House will store and control access to information if its proposals are adopted. It outlines how personal information will be stored and accessed, the circumstances under which it may be disclosed and to whom. Under the identity verification proposals, BEIS stress that access to the register will be carefully managed, allowing only identified or authorised persons to file information. New processes will be implemented for sensitive information to be protected.
- Part D: Ensuring compliance, sharing intelligence, other measures to deter abuse of corporate entities. Government proposes various measures, including routine cross-checking of information on the register against data held by other Governmental and private sector bodies, requiring companies to provide details of their bank account, and limiting the number of concurrent directorships that an individual can hold.
- Part E:Implementation. The final part addresses implementation issues. The proposals in the consultation, if implemented in full, would go to the core of the Companies Act and take several years to complete. There are significant implications for the Companies House operating model and approach and Companies House charges are likely to increase. BEIS states that all of the services that Companies House provides will be modernised and transformed to provide a better service to customers.
The consultation closes on 5 August 2019 and we will keep you updated as to which proposals are adopted.