The Government has confirmed that it intends to introduce a bill in this Parliament to set up a new, publically accessible central register of UK company beneficial ownership to “improve corporate transparency and accountability in the UK.”

The register will contain information on individuals who ultimately own or control more than 25{ba3215b0bf35eaeb06be458b3396ffbfc50bb9db10c9ff1594dfc3875e90ea48} of a company’s shares or voting rights, or otherwise exercise control over the company and its management. It will detail where a person’s interest is held jointly or with another individual or as a result of various shareholdings in the company, such that they can control more than 25{ba3215b0bf35eaeb06be458b3396ffbfc50bb9db10c9ff1594dfc3875e90ea48} of the company’s shares or voting rights. Where a qualifying beneficial interest in a company is held through a trust, the trustees or any other natural persons exercising effective control over the trust will be required to be disclosed as the beneficial owner of the company. In most cases, that will only require the trustees to be registered, but in some cases may be another person such as the beneficiary or settlor.

In summary, the register will contain the beneficial owners’:

as well as:

Companies will be required to maintain their own register and make any necessary changes to it. All information held by the company will be provided to Companies House, where it will be publically accessible with the exception of residential addresses and full dates of birth.

Companies will be required to provide an initial statement of beneficial ownership on incorporation and will then be required to confirm that the information held at Companies House is correct at least once a year. Similar ownership details of LLPs will also be included on the register.

Existing company law criminal offences will be extended or replicated in order to enforce such new rules on disclosing beneficial ownership.

Other Government proposals

Other related proposals include the following:

From a public policy perspective, the new register of beneficial ownership will be a step towards greater transparency as to who “really” owns a UK company. However, the proposal is not without controversy. The Law Society has warned that the “proposals may damage the attractiveness and competitiveness of the UK as a jurisdiction for the incorporation of companies. We believe that the effect of introducing the proposals will be to drive investors to form companies outside the UK and that the UK could therefore lose a considerable amount of business as a result.”

With regards timing, all that the Government is saying at the moment is that the required primary and secondary legislation needed to enact the above measures will be introduced “as soon as Parliamentary time allows.” Nothing has been drafted yet, so it is unlikely that the bill will become law by the time of the May 2015 general election. This lack of clarity as to when these measures might come into force (in particular the register of beneficial ownership and abolition of corporate directors) is frustrating for the many thousands of companies who will be affected by the increased compliance burden.