The\u00a0following\u00a0was published by BIS this morning:<\/p>\n
WRITTEN MINISTERIAL STATEMENT<\/p>\n
Rt Hon, Dr Vince Cable, Secretary of State For Business, Innovation and\u00a0Skills,<\/p>\n
DEPARTMENT FOR BUSINESS, INNOVATION AND SKILLS<\/p>\n
Publication of Discussion Paper on Transparency and Trust\u00a015 July 2013<\/p>\n
Today I am publishing a discussion paper which sets out a range of proposals\u00a0to enhance the transparency of UK company ownership and increase trust in\u00a0UK business. These measures will help prevent illegal activity; better enable\u00a0companies to be held to account; and provide businesses, investors,\u00a0employees and consumers with confidence that companies are acting fairly.\u00a0They will support the development of a business environment where\u00a0companies and individuals can operate and invest with confidence.<\/p>\n
The first part of the paper puts forward measures to ensure we know who\u00a0really owns and controls UK companies, following our G8 commitments on\u00a0preventing the misuse of companies. The main elements of this section of the\u00a0paper include:<\/p>\n
1. Options for the implementation of a central registry of information on\u00a0companies\u2019 beneficial ownership, maintained by Companies House.<\/p>\n
We propose that the registry would hold information on individuals with\u00a0an interest in more than 25 per cent of the shares or voting rights in a\u00a0company, or who otherwise control the way the company is run. We\u00a0consider whether information in the registry should be made public,\u00a0what information is to be provided and how it is to be updated.<\/p>\n
2. A proposal to prohibit the issue of bearer shares. Bearer shares allow\u00a0the owner of the shares to remain hidden as their name is not\u00a0disclosed on a company\u2019s register of members. The paper proposes\u00a0that holders of existing bearer shares should be given a set period of\u00a0time to convert these shares to ordinary registered shares.<\/p>\n
3. Options to enhance transparency around\u00a0the use of nominee directors,\u00a0including whether they should be required to disclose their status to\u00a0Companies House and who they are acting for. While nominees can\u00a0be used in legitimate commercial scenarios, their use can allow the\u00a0true owners of a company to remain hidden.<\/p>\n
4. A proposal to abolish companies from being appointed as directors\u00a0(\u2018corporate directors\u2019). Although rarely used in the UK, these can result\u00a0in complex corporate ownership structures which hide the beneficial\u00a0owner\u2019s true identity.<\/p><\/blockquote>\n
There is a second half of this paper which deals with penalties - but it is so\u00a0inadequate\u00a0that I will ignore it for now and just consider the above.<\/p>\n
The difficulty with what is proposed is that it is also so inadequate. First, on the beneficial ownership\u00a0register\u00a0as I have shown almost<\/a> no company\u00a0regulation\u00a0is enforced now - so unless the issue of resources at\u00a0Companies\u00a0House is addressed this register will not be policed either.<\/p>\n
Second, there is no verification process in this proposal. It is clear that we are to rely solely on self certification by those committing crime as to their true identity. That is absurd. We need a system where banks must supply this data for all companies for\u00a0whom\u00a0they open accounts. Nothing less will do or this process is a farce.<\/p>\n
Third, 25% is too high a figure - 10% is much more\u00a0realistic and all related parties must be taken into account.<\/p>\n
Fourth, not having this on public record makes it meaningless and gives the public no protection.<\/p>\n
Fifth, what\u00a0happens\u00a0in the first twenty one months of the life of the\u00a0company\u00a0where no data need be supplied now? Is\u00a0fraud\u00a0on that period acceptable? What measures will be taken on that?<\/p>\n
Sixth, what penalties will there be for non-disclosure? Unlimited liability is the most basic\u00a0requirement.<\/p>\n
Seventh, why is there no mention of imposing a duty on company formation agents or\u00a0Companies\u00a0House itself to prove\u00a0identity?<\/p>\n
I could, and will go on in due course.<\/p>\n
Turning to bearer shares, it is\u00a0shocking\u00a0the UK still has these. They just need to be banned, as do\u00a0corporate\u00a0and nominee directorships - all of which are licence for abuse.<\/p>\n
If this is the best we get from Lough Erne then the\u00a0government's\u00a0best is not good enough by a long way.<\/p>\n","protected":false},"excerpt":{"rendered":"
The\u00a0following\u00a0was published by BIS this morning: WRITTEN MINISTERIAL STATEMENT Rt Hon, Dr Vince Cable, Secretary of State For Business, Innovation and\u00a0Skills, DEPARTMENT FOR BUSINESS, INNOVATION
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