On the 4th June 2014 the Queen announced a bill intending to make the United Kingdom the best place in the world to start, finance and grow a business. The bill was given Royal Assent on the 26th March 2015 and since then, while some of the aspects contained within it have become legally binding, some others are yet to take effect.
One of those that has already come into force is the abolition of the issuing of Bearer Shares. One of the primary purposes of the Act is to make business in the UK more transparent, and by removing the opportunity for people to hold nameless, easily transferable share certificates, the Act aims to make the true ownership details of companies clearly available to those who have an interest. While the use of Bearer Shares in UK companies was not prolific, the removal of this opportunity for anonymity can only help to make business ownership less clandestine.
The register of People with Significant Control came into force on the 6th April 2016. This register lists anyone who holds more than 25% of a company’s shares or voting rights, anyone who holds the right to appoint or remove directors, and anyone who has the right to, or actually exercises the right to influence or control the company. In addition it lists anyone who holds the rights to, or actually exercises significant control over a trust or company that holds shares, voting rights and other influence.
Because this register has been released as open data, anyone with an interest can access the list. Various research projects have already found some fascinating patterns of information within the register. However, as it is still in the early stages, it is believed that a certain amount of information has been published which is not true; either purposefully or through difficulties filling in the information. For example almost 3,000 companies registered their beneficial owner as a company with a tax haven address: this is not allowed under the rules. Ten companies were controlled by people who put their nationality as ‘Cornish’, and 76 beneficial owners had the same names and dates of birth as people on the United States sanctions list.
There is a huge volume of data within the register and it shows that a lot of work will have to be done to iron out inputting issues, but it will also make a huge difference to the law enforcement agencies when trying to establish details of fraudsters and criminals.
One of the other changes has been the speeding up of the process to strike a company from the business register. By reducing the time it takes to voluntarily strike your company from the register, or to have a company struck from the register, it speeds up the process and saves companies money. At the same time, if you are waiting for a company name to become available, this change will reduce the waiting time.
While the Act increases the amount of information held by Companies House, it also aims to safeguard particularly sensitive, personal information that is necessary for legal purposes, but could be dangerous to the security of directors; such as home addresses and dates of birth. While the instances of cybercrime and identity theft are common, the Act makes it harder for criminals to use the registers to glean information that they could use to build up a false identity and commit fraud.
While there are a variety of aspects included within the Act that are yet to come into force, it is clear that on the most part, the changes involved so far have had a positive affect and will add to the government’s mandate to make the UK one of the best places in the world to do business.