Transparency and Trust for companies
7th July, 2014
The Government has announced proposals to make sweeping revisions to various areas of company law, under the theme of improving “Transparency & Trust”.
Under “Transparency”, companies will be required to provide information about those people who have significant beneficial ownership. Information about anyone who ultimately owns or controls 25% of more of a company will be required to be kept, either at the company’s registered office or at Companies House . This information will be available for public access. There will also be changes to the Annual Return procedure.
“Trust” will be improved by tightening up the rules on the disqualification of directors, and generally making the regime more punitive towards directors whose behaviour is deemed to warrant a penalty.
The changes include the introduction of the ability to ban from being a director of a British company a person who is convicted abroad of a criminal offence or who has an unsatisfactory background (for example, having been a director of foreign companies that failed).
In addition, the time period for the Insolvency Service to start proceedings to disqualify directors after an insolvency is to be extended from two years to three.
Finally, there will be a requirement for all directors to be “natural persons”, putting an end to the ability for companies to act as directors of other companies.
These proposals, and more, are outlined in the “Small Business, Enterprise and Employment” bill, put before Parliament on 25th June 2014, and which must now run through the Parliamentary process before becoming law.
For advice on the potential impact on your business, contact Hugh Strickland, Corporate Partner at [email protected].