Corporate Transparency and Register Reform: The UK Government’s Latest Response

N News

September 29, 2020

4.2 million UK companies are currently registered with UK Companies House and more than 600,000 companies are incorporated each year. 10 million documents are filed every year at Companies House, providing a broad range of data on the companies, their directors and their shareholders. This information is accessed over 9.4 billion times a year! It’s clear to see that the information filed at Companies House provides a rich seam of information. However, there are also concerns that:-

 

  • UK registered entities are being misused by ‘international criminals and corrupt elites’;
  • some information held at Companies House is inaccurate;
  • personal information on the register is open to abuse; and
  • there are only limited cross checks of information held by Companies House against that held by other public/private sector bodies.

 

These concerns led the UK Government to consult on proposed reform in 2019. In that consultation, the UK Government asked for the public’s thoughts on its plans to “enhance the role of Companies House and to increase the transparency of companies and other legal entities”. The consultation period closed in August 2019 - 1,320 responses were received.

 

The UK Government has now considered that feedback and, earlier in September, published its further response. In summary, the current proposals include (to quote):-

 

  • identity verification: introducing compulsory identity verification for all directors, People with Significant Control and those filing information on behalf of a company;
  • reforms to Companies House powers: providing the Registrar of Companies stronger powers to query, seek evidence for, amend or remove information and to share it with law enforcement partners when certain conditions are met;
  • protecting personal information: improving the processes for removing personal information from the register; and
  • company accounts: the introduction of full digital tagging of accounts to ensure consistency, easier identification and comparability of information on the register.

 

The Response also sets out the intention to ‘operationally transform’ Companies House e.g. for it to become fully digitised. Those changes are planned over 5 years from 2020 – 2025.

 

It’s worth noting that (i) where the Response refers to ‘company’, the intention is for it to cover LLPs and LPs, so some of the changes will affect General Partners of LPs and members of LLPs too; and (ii) the intention to verify the identity of directors and PSCs (and General Partners) will apply retrospectively, and not just to ‘new’ filings.

 

Clearly, the UK Government is pre-occupied with other matters right now, and the Response also acknowledges that funding for the changes will need to be agreed, further consultation will be required in certain areas, and some of the changes will require legislation to being them into effect (and others won’t).  However, if and when the changes are introduced, they will represent significant change to the way in which users interact with Companies House, and the powers which the Registrar will have. 

 

Click [here] for a link to the Response itself, and click [here] for the Government’s own press release.