The Government has recently published a discussion paper, ‘Transparency & Trust: Enhancing the transparency of UK company ownership and increasing trust in UK business’, inviting feed-back on a number of proposals concerning the transparency of company ownership and control, enforcement of directors’ duties and compensation of creditors.  Among other things, the Government proposes to:  

  • require companies to obtain information about the beneficial ownership of their shares and file this information with Companies House1. The Government seeks comments on what information should be provided to Companies House, and whether the information should be publicly available or restricted to certain law enforcement and tax authorities;
  • prohibit the use of bearer shares (to prevent shares of this type from being used to protect an individual’s identity);
  • ban nominee and corporate directors;
  • amend directors’ statutory duties for key sectors such as banking (and give sector regulators powers to disqualify directors);
  • allow additional factors to be taken into account by the Court when deciding whether to disqualify a director;
  • allow disqualification in the UK of directors found guilty of misconduct in relation to overseas companies; and
  • require directors, and their advisers, who have acted fraudulently or negligently to personally compensate those adversely affected by their actions.

The deadline for responses to the consultation is 16 September 2013. The Government’s aim is to introduce reforms before the current Parliament ends in 2015.

Discussion paper: ‘Transparency & Trust: Enhancing the transparency of UK company ownership and increasing trust in UK business’ available at: uploads/system/uploads/attachment_data/file/212079/bis-13- 959-transparency-and-trust-enhancing-the-transparency-of-ukcompany-ownership-and-increaing-trust-in-uk-business.pdf

On 18 July 2013, the Insolvency Service (‘IS’) published a consultation paper on changes to insolvency regulation and practice that are intended to complement those set out in the Government discussion paper referred to above.  Among other things, the IS proposes to give administrators the power, currently exercisable only by liquidators, to take action against directors for fraudulent or wrongful trading but without the need for the company to be put into liquidation.

The deadline for responses to the IS consultation is 10 October 2013.

Insolvency Service consultation paper available at: profession/consultations/redtapechallenge/rtc-consultation.pdf