Uk Companies Owners Register to be Introduced

LONDON - Sept. 3, 2013 - PRLog -- These reforms are important: Enhanced transparency of company ownership will help us to tackle tax evasion, money laundering and terrorist financing. It will improve the investment climate and make it easier to do business.

Vince Cable, the UK’s Secretary of State for Business, Innovation and Skills says:

“The enhanced transparency will help investors, employees and consumers have more trust in UK companies.”

He has published a discussion paper so all interested parties can have input into this matter (see https://www.gov.uk/government/consultations/company-ownership-transparency-and-trust-discussion-paper

It has been proposed that the reforms will enhance corporate transparency by improving our ability to know who really owns and controls UK companies.

This paper considers a range of proposals to enhance the transparency of UK company ownership and increase trust in UK business. This will help to:

·      Prevent illegal activity

·      Better enable companies to be held in account

·      Provide businesses, investors, employees and consumers with confidence that companies are acting fairly

Vince Cable is proposing that a register should be kept to record all beneficial owners of UK companies; this will:

Ensure that we know who really owns and controls UK companies.

Ensure that the UK is a trusted place to do business and invest in.

As this is still a discussion paper, it has not yet been decided if this information will be made available to the public or if it will be restricted to law enforcement and tax authorities.

BENEFITS FOR THE INVESTIGATOR.

When undertaking business intelligence or due diligence into companies, it is a regular occurrence that the shareholders of a company (and in some cases the directors) are other companies and in many cases, are offshore companies. This allows the beneficial owners of companies to hide their involvement in UK companies.

If these proposals become law and the information is open to the public, it will certainly assist investigators when trying to tie certain individuals to companies.

OFFSHORE OWNERSHIP

When UK companies are owned by off shore companies, from jurisdictions that do not require the owners to be disclosed, I fail to see what checks and enforcement the British Government will be allowed to use to force the disclosure of beneficial owners, especially when the owners are unscrupulous individuals who are using offshore companies to hide their wealth and commercial involvements.   They could in fact lie about the real owners.

The other problem I see is how far will they go back; many of us who have chased ownership of offshore companies are aware that owners of companies, in many cases are also offshore companies, and so it goes on and on until the last company is owned by the first company.

When companies are legally incorporated in other jurisdictions, I believe the British Government will have difficulty in forcing companies to disclose to them when they do not have to disclose to their own governments.

EU COMPANIES

Many countries, such as France, Belgium, Spain, Portugal and others in the European Union, have incorporated companies known as ‘Society Anonymous’; this is exactly as it sounds. These SA companies do not disclose the owners of the company and therefore, it is very to difficult identify owners of SA companies.

As we know, there are many UK companies owned by other EU companies and in most cases they are SA companies, forcing these companies to disclose on this new register, which I believe has become a matter for the EU courts.

The other scenario is what happens when a EU SA company opens a branch office in the UK, they are only registered for tax, they are not a UK company; they are a company incorporated in another EU jurisdiction. The EU allows companies in one country to open branch offices in another EU country, its all part of the free trade agreements.

So a legally incorporated UK company will have to conform and have full disclosure, and a EU SA company, which is conforming to their own countries laws with a UK branch office, will not.

This may well send the very people they are trying to control to other EU countries to open companies and then they will open a branch office in the UK.

READ THE PAPER.

I suggest that all investigators who are interested in this subject, should read the proposal paper and make their thoughts known to the Secretary of State.

If they manage to address some of the issues above and it comes into force, it will certainly be a great tool for investigators, I just hope that it does not become one sided and penalise UK companies, and still allows the tax dodgers and criminals to operate through some EU or international loop hole.

You have until the 16^th September 2013 to make submissions to transparencyandtrust@bis.gsi.gov.uk

WIS International undertake company due diligence and business intelligence which cover research into offshore companies and beneficial owners of companies. In their company reports they provide all available data at the outset which in turn leads to more in depth research. See http://www.wis-int.com/services/business-intelligence-due-diligence-company-reports-directors-reports_3306 and see how WIS International can help your company.

Roy Whitehouse

www.wis-int.com