01 August 2014 #Corporate
The UK Government confirmed in the Queens Speech the intention to introduce a publicly accessible register of a company’s beneficial ownership in the UK. This will apply to all corporate bodies currently registered at Companies House.
Under the proposals, the details of individuals who own 25% or more a company’s shares or voting rights must be provided to the central registry, held at Companies House. There will be an obligation on companies to provide this information, including the beneficial owners’ name, date of birth, nationality, address and details of their ownership. The information will be available for public inspection, with the exception of addresses and dates of birth, and must be updated every 12 months (minimum). The proposals will also see a prohibition of a company as director of another company, with certain exceptions.
The aim of the proposals is to increase transparency, as the government pushes for greater openness to tackle tax evasion, money laundering and other crimes. It will further increase accountability of corporate bodies, ensuring honesty in the corporate environment. This will give both national and international businesses confidence in the UK market which in turn, the government believes will encourage investment.
The proposals have generally been welcomed in line with the recent trends of increased transparency of companies seen in recent years. Releasing information publically of those with a large share ownership is a practical and justifiable step in this direction. Yet there are issues concerning confidentiality, and smaller businesses may prefer to keep this information private. The changes will also confer a greater administrative burden on businesses. However, on the whole, the proposals will confer an overall benefit on business and help to ensure businesses, investors and society have increased trust in the UK market.