Government Consultations on Companies House reforms to combat the abuse of anonymous or fraudulent shell companies and partnerships, concluded in February. This Corporate Transparency and Register Reform White Paper was presented to Parliament setting out the Government’s final position of the reforms before they become legislation.
Outlining the support for national security, combating corruption and fighting organised crime.
- Companies House will be empowered to require companies to file digitally.
- Changes to Part 35 of the Companies Act 2006, the Registrar will be equipped with new powers to query suspicious appointments or filings, and in some cases request further evidence or reject the filing. They will also have a greater and extensive legal gateways to for data sharing with law enforcement, government bodies and the private sector.
- Those setting up, managing and controlling companies or other registrable entitles will have a verified identity with Companies House, or have registered and verified their identity via an anti-money laundering supervised third-party agent. This will make anonymous filings harder and discourage those wishing to hide company ownership through nominees or opaque corporate structures.
- Privacy to be increased with the suppression of some personal information made public on the register in the past. Individuals who can provide evidence that personal information on the public register put them at risk or harm can apply to have it suppressed.
- Expansion of the Registrar’s administrative removal powers, the removal of information more swiftly, such as a fraudulent directors appointment
- Registrar to remove a registered office address without application if it is clear that the company is not authorised to use the address
- Powers to query any information supplied or any information already on the register, including company names.
- Powers to change a company name to its number where there is a failure to comply with existing directions to change a name.
- Adjusting the “trading defence”, so as to avoid a challenge on its name on the basis that it is already trading under that name.
- Closing loopholes on names challenged which revert back to the offending name or one very like it and breaching the terms of the order. At present Companies House have no legal power to stop this.
- All directors will be required to verify their identity.
- All PSCs of companies, Limited, LLP, SQPs and unregistered companies will be required to verify their identity.
- Presenters of information will be required to have a verified identity at Companies House in order to file information.
- Directors of overseas companies must verify their identity.
- Corporate directors must have all natural persons as directors, and their identities verified.
- All LLPs must have at least one natural person, members of LLPs must verify their identity and corporate members will be required to verify the identity of their directors or equivalent such as manging officer.
- Corporate general partners of LPs will be required to nominate a natural managing officer and verify their identity.
- Scottish general partnerships will be banned from being appointed as a corporate director to prevent possible loopholes in corporate director restrictions.
- Registrable Legal Entities must verify all directors or equivalent
- Corporate directors of Limited companies must be entities with legal personality such as other limited companies and LLPs.
- Corporate directors must be registered within the UK.
- Directors or equivalent of corporate directors must all be natural persons.
Third party agents
- Registration of companies – third party agents will be required to submit checklists of identity verifications, checks and declarations. The declaration will confirm that the third party agents understand that they are responsible for having conducted those checks.
- Supervisors and third party agents will be required to inform Companies House if supervisions ends.
- Third party agents must be registered in the UK
- Removal of restriction in the Companies Act that only allows a director’s/PSC’s usual residential address be used for correspondence, so allowing analysis of usual residential address.
- Financial institutions have to report any discrepancies they identify between information they hold and Companies House, on beneficial owners, PSCs, this will be extended to include director information and registered office addresses.
- Removal of requirement to provide business occupation / allow application for removal of occupation within a historical filing – offers more privacy for those with sensitive jobs.
- Allow application to suppress day of date of birth within a historical filing.
- Allow applications to suppress signatures within a historical filing.
- Allow applications to supress residential addresses not currently possible as sensitive addresses – the address of a domestic abuse refuge.
- Time period to be introduced before suppression of registered office / allow applications for access to supressed registered office addresses – in order to restore a company in case of a claim.
- Allow applications to protect individuals names or all required particulars appearing publicly. Evidence will be required as to the risk of harm.
Transparency of Ownership
- Define and require companies to collect full names of all company subscribers, shareholders and guarantees.
- Provide a one off full list of current shareholders of non-traded companies.
- Collect more information from companies exempt from PSC requirements, information in connection with the ownership and control of these companies.
- Collect more information from companies owned by registrable legal entities. Is it listed on a regulated market.
- Filing options of small companies, simplify by reducing the filing to just two, micro-entities and small companies. Removing abridged and fileted accounts. Micro accounts will be required to file a profit and loss account.
- File once with Government – enable companies to file accounts in one central place and for government bodies to extract the information they require.
- Requiring accounts to be filed digitally with Companies House.
- Requiring accounts to be fully i-XBRL tagged and align tagging standards with HMRC.
- Checking of information and enhanced validation checks on the company’s eligibility to file accounts of a certain type.
- Introducing requirement for dormant companies to file statement of eligibility.
- Closing loopholes for changes to the accounting reference date, by limiting the number of times a company can shorten its accounting reference date. To be aligned with restrictions on extending the accounting reference date. Reason to be provided to request shortening its period for a second time in 5 years, and will only be granted for good business reasons.
- Clarifying the requirement for a company to prepare and deliver one set of accounts, this proposal is to close a loophole where a company can file multiple accounts with different government bodies.
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