Out-Law News 2 min. read
18 Nov 2015, 11:02 am
The central register of companies' beneficial owners will be made available through Companies House ahead of other planned measures to improve corporate transparency, which are scheduled to come into force in 2017, according to an 'implementation plan' published by the UK government.
Other EU countries are due to introduce central registers of corporate beneficial owners by 2017 as part of their implementation of the EU's Anti-Money Laundering Directive. However, these registers need only be accessible to 'competent authorities', financial intelligence units, obliged entities and "persons who can demonstrate a legitimate interest to access the information", and not the wider public.
Members of the G8 leading global economies committed to keeping beneficial ownership registers in June 2013, and the UK confirmed that it would make its register publicly accessible that November. Implementation of these commitments is being overseen by global standards-setting body the Financial Action Task Force (FATF).
Commenting on the publication of the UK government's plans, civil fraud and asset recovery expert Alan Sheeley of Pinsent Masons, the law firm behind Out-Law.com, said he was pleased to see the UK "following through with this commitment".
"Any publicly available information that reveals the true ownership of corporates and trusts is a good thing in a modern society," he said. "It creates a further hurdle that fraudsters will need to overcome if they are to hide their ill-gotten gains. However, only time will tell if this can truly be implemented on a global scale."
'Beneficial ownership' of companies refers to those that hold more than 25% of shares or voting rights. In the UK, the requirements will apply to any bodies corporate that currently register information on their members at Companies House, including limited liability partnerships. Companies that already comply with similar disclosure requirements under the regulatory regime of the Financial Conduct Authority (FCA) or relevant securities markets will be exempt.
Companies will be required to maintain details of their beneficial owners' full names, dates of birth, nationalities, country or state of usual residence, residential addresses, service addresses and details of the beneficial interest, according to the UK government's response to a consultation on the creation of the register. The register will be kept available for public inspection and accessible at Companies House, with the exception of residential addresses and full dates of birth. Protected information will be accessible by certain UK and overseas enforcement authorities.
The UK also intends to ensure that trustees obtain and hold accurate details of the beneficial ownership of their trusts, including details of the settlor or settlors, trustee or trustees and beneficiaries, according to the implementation plan. "Domestic competent authorities" will also be able to access this information in relation to any trusts that "generate tax consequences in the UK", it said. It is due to consult on extending the transparency requirements to foreign companies that invest in high value UK property or bid on UK public contracts, according to the implementation plan.
The UK began a review of its anti-money laundering (AML) and counter-terrorist financing (CTF) rules in September, with a view to improving the "efficiency and effectiveness" of the rules. As part of this review, and of its implementation of the EU directive, it will ensure that UK laws "clearly define the criteria for ownership and control that identify a natural person as the 'beneficial owner' of a company", according to the implementation plan.
The plan also refers to recent changes to UK company law designed to improve corporate transparency. These include a ban on issuing new bearer shares and requiring existing bearer shares to be surrendered, and a ban on the use of corporate directors in the majority of circumstances.