Register will show who really owns and controls UK companies

The government is to press ahead with plans for greater business transparency by creating a public register of who really owns and controls UK companies.

Details of the proposal were first set out in the discussion paper, Transparency and Trust, published in July.

Prime Minister David Cameron said: “We need to know who really owns and controls our companies. Not just who owns them legally, but who really benefits financially from their existence.”

The Department for Business, Innovation and Skills (BIS) will set out more details in 2014.

BIS says it’s likely that it will introduce a system similar to the one that currently applies to the disclosure of information on company shareholders.

This would mean that Companies House would hold – and make publicly accessible – the names of the beneficial owners of a company and details of their interest in that company.

It will be possible to have exemptions from public disclosure in certain circumstance – for example, where it is necessary to protect individuals whose safety might be at risk.

BIS will also set out its plans on other proposals from the Transparency and Trust discussion paper including:
• to abolish bearer shares – i.e. shares whose ownership is completely opaque
• to tackle the use of corporate directors – one company as a director of another
• to address situations where a front director is registered at Companies House, but the control lies concealed elsewhere
Business Secretary Vince Cable said: “People have a right to know who controls UK companies and greater openness will help tackle tax evasion, money laundering and other crimes.

“The vast majority of companies and directors in the UK contribute productively to the economy, abide by the rules and make an enormous contribution to society. But an errant few operate in the shadows, creating ownership structures that serve to deceive. We’re now shining a light on who really owns and controls companies in the UK and proudly leading the world in this initiative.”

We shall keep clients informed of developments.

Please contact us in our Warminster office on 01985 214444, or Westbury on 01373 865577, or email cgoodbody@mulaw.co.uk if you would like more information about the issues raised in this article or any aspect of company law.