Individual directors and people with significant control (PSCs) of companies, as well as those who present information for filing at Companies House, will have to verify their identities under a package of UK government proposals to improve the accuracy and relevance of information held at Companies House.
Other proposals include:
- Collecting more information on shareholders for the register of members and filing changes to that information at Companies House within 14 days (rather than as part of the confirmation statement process).
- Extending the powers of Companies House to query and seek corroboration on information before it is entered on the register.
- Cross-checking information against data held by other government and private sector bodies and requiring entities which are regulated for anti-money laundering purposes (such as banks, accountancy and law firms) to report anomalies in data to Companies House.
- Only allowing identified or authorised persons to file information at Companies House.
- Making it easier to remove inaccurate information from the register without going to court.
- Improving the process for delivery of annual accounts to Companies House.
- Requiring basic information about listed entities (such as where they are listed) to be included on the PSC register.
- Introducing measures to deter abuse of UK legal entities, including ending the business activities of limited partnerships which are being misused; imposing limits on the number of directorships any one individual can hold; and requiring the disclosure of information about a company’s bank accounts.
As the consultation itself makes clear, the proposals amount to the most significant reform of the UK’s corporate registration framework since a register was first introduced in 1844 and will require wholesale changes to systems, processes and staffing at Companies House. The consultation closes on 8 August 2019 but implementation will take some years.
Osborne Clarke comment
These reforms are long overdue and necessary to advance the government’s corporate transparency agenda. There have been many criticisms about the accuracy of Companies House information and the resources available to police that information. This has undermined the effectiveness of recent measures such as the granting of free online public access to the register in 2015 and the introduction of the PSC register in 2017.
The inaccuracy of information on the UK’s public register has also been a strong counter-argument run by the British Overseas Territories (such as Cayman, British Virgin Islands and Bermuda) and Crown Dependencies (Channel Islands and the Isle of Man) who are resisting pressure by the UK government to introduce public beneficial ownership registers for legal entities registered in those jurisdictions.
But, necessary as these changes are in order for corporate transparency to become more than a soundbite, they will have profound implications for the way that companies are administered in the UK – for companies, their advisers and third party agents.