The UK Government has announced its plan to make details of who owns and controls UK companies publicly available.
"Corporate transparency is essential to reduce tax evasion, eliminate corruption and ensure citizens get the services they deserve" Sanjay Pradhan, World Bank Group Vice-President.
Following a call for evidence on its discussion paper "Transparency and Trust", the UK Government has announced its plan to make publicly available details of who owns and controls UK companies. The details of what information should be held and how companies should update it will be published in the Government's response, which is expected in 2014. We suspect that a similar model to that used for disclosure of information about company shareholders will be used. Companies would, therefore, need to hold the names and addresses of their beneficial owners and details of their interest in the company. Companies House would then hold the names of the beneficial owners and their interest in the company which would then be updated in the annual return. This would make the information relating to the beneficial owners publicly available. In the response the Government will also set out its plan on other proposals in the "Transparency and Trust" discussion paper. These include:
- banning the creation of new bearer shares;
- options to improve transparency around the use of nominee directors;
- whether companies should be prohibited from appointing corporate directors;
- clarifying the responsibilities of directors in key sectors, in particular, banking; and
- changing the factors to be taken into account in disqualifying directors.
The Government hopes that increasing transparency of company ownership will help it to tackle tax evasion, money laundering and terrorist financing. It also expects that it will ensure trust in UK companies and that this in turn will lead to increased investment and growth. In his foreword to the executive summary accompanying the discussion paper, Vince Cable said "Government is not alone in recognising the importance of this agenda. Leading figures in the business community acknowledge the importance of transparency and trust. They know that having an effective system for identifying and dealing with poor business behaviour gives confidence in UK companies and helps create an environment in which honest entrepreneurs are willing to invest in activities promoting growth and employment."