BEIS consults on proposals to increase transparency of UK companies

Charitable companies, and charities with subsidiary trading companies, will be interested in a new consultation published by BEIS on 5 May, setting out proposals “to enhance the role of Companies House and increase the transparency of UK corporate entities”.

With a view to improving the accuracy of information held by Companies House and to strengthening the UK's ability to combat economic crime, the Government is consulting on a wide range of measures.

If implemented, the proposed measures would be the most significant reform of the UK’s company registration framework since a register was first introduced in the 19th century, and result in significant operational changes for all companies.

The proposals fall into five parts, which can be summarised as follows:

Part A: Knowing who is setting up, managing and controlling corporate entities.

The government proposes that individuals with a key role in companies, including directors, People with Significant Control ("PSCs") and those filing information, should have their identity verified. It 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.

A series of reforms are proposed to improve the accuracy and usability of data held on the companies register, including:

  • extending the powers of Companies House to query and seek corroboration of information before it is entered on the register;
  • making it easier to remove inaccurate information from the register;
  • improving the process and delivery of annual accounts to Companies House; and
  • making some small improvements to the quality of information about PSCs.

Part C: Protecting personal information.

In this part, the Government considers the implications of the proposed increased information disclosure, and sets out how personal and protected information held by Companies House will be able to be accessed.

Part D: Ensuring compliance, sharing intelligence, and other measures to deter abuse of corporate entities.

This part considers how data held by Companies House on UK corporate bodies could be improved through cross checks against data held by other government and private sector bodies. In addition, various measures are proposed by the Government to ensure compliance and deter abuse, including:

  • requiring companies to provide details of their bank account, and
  • limiting the number of concurrent directorships that an individual can hold.

Part E: Implementation.

This part set out the implications of the proposed reforms for the Companies House operating model. It is likely that Companies House will increase. Implementation of the reforms is likely to take several years. 

The closing date for responses to the consultation is 5 August 2019. The Government will set out its next steps when it formally responds to the consultation.

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