UK Private Company Ownership going public – threat or opportunity?

Britain is pressing ahead with plans to have a publicly-accessible, central register of the individuals who ultimately own, and control, UK companies. Will this move to transparency increase trust in UK business as the government hopes or have investors running for cover?

Background

In 2013, while holding presidency of the G8, the UK government pressed for a publicly-accessible register of people with significant control of companies (PSC Register) to be adopted by all G8 members. While other G8 members would not, at the time, go as far as this they did to agree to publish plans to ensure companies know who owns them. Meanwhile the UK was undeterred in not getting agreement and has pressed ahead with its plans to construct its own public PSC Register. It is their stated belief that transparency and accountability are essential for trust and that businesses, investors and society will have greater confidence in the UK, and in doing business in the UK, if the company register and, in particular, the details of the ultimate beneficial owners of companies, are accessible to the public.

UK position and other European initiatives

Having initially consulted on this the UK is now working the Small Business, Enterprise and Employment Bill 2014-15 through parliament including fundamental changes to the manner in which company data is maintained and accessible to the public. As the Bill presently stands all companies will have to identify and disclose details of the ultimate beneficial ownership of any shareholder who holds, or exercises control of, more than 25% of the shares in issue of a company or anyone who exercises undue influence on the board to the Company Registry. A consultation document is currently in existence outlining the proposals for the secondary legislation that sets out how it will operate (and crucially exemptions to the rule) which runs until 9 December. That consultation document can be found at:

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/367578/bis-14-1145-the-register-of-people-with-significant-control-psc-register-register-final-1.pdf

The stated aims are to minimise illicit activities whether they be money laundering, tax evasion, corruption or terrorist financing. All are, of course, highly laudable proposals, aims and concepts. However the question remains that, with the UK running well ahead of other countries, will the UK public register achieve those aims and to what extent will it create a burden or hindrance to business?