BEIS is consulting until 5 August 2019 on changes to the information companies would be required to disclose to Companies House, with increased checks and improved exchange of intelligence with law enforcement bodies to prevent abuse of the system for money laundering and tax evasion.
Announcing the consultation, the minister for small business, consumers and corporate responsibility at BEIS, Kelly Tolhurst, said: ‘While the overwhelming majority of UK corporates operate wholly legitimately, concerns have been expressed about the misuse of UK corporate entities, the filing of false information on the companies register held at Companies House and the use of innocent people’s information on the register to commit fraud and other acts of harm.’
‘In the last three years there have been almost 10,000 complaints to Companies House from people concerned about their personal details, with worries including fraud and misuse of personal details topping the list’, the minister added.
The document proposes a range of reforms aimed at limiting the risks of misuse, set out under the following five broad headings.
Knowing who is setting up, managing and controlling companies. This would allow Companies House to verify the identity of individuals who have a key role in companies, including directors, people with significant control and those who file information, possibly extending to information about shareholders, which could be achieved by requiring banks, accountants, company formation agents and others covered by the Money Laundering Regulations 2017 to share the results of their customer due diligence with Companies House.
Improving the accuracy and usability of data on the companies register. Companies House powers would be extended to query and seek corroboration on information before it is entered on the register and make it easier to remove inaccurate information. Improvements around delivery of annual accounts to Companies House would introduce a more uniform format for the submission of accounts to enable automated checks and improved statistical analysis. The document proposes to limit the number of times companies would be allowed to delay submitting accounts by shortening their accounting period. Collection of some further basic information would enable third parties to obtain information more easily where there is an exemption from ‘people with significant control’ requirements. The government proposes to maintain the current rules permitting records of dissolved companies to be retained for 20 years.
Protecting personal information. This would allow collection of certain personal information about directors to be suppressed, including the ‘day’ element of their date of birth, changes in gender and signatures.
Ensuring compliance, sharing intelligence, and other measures to deter abuse of corporate entities. Companies House would be allowed to cross-check data on UK corporate bodies against data held by other government and private sector bodies, such as banks, accountancy and legal firms, and company formation agents. The government is considering introduction of a new requirement for UK companies to notify Companies House within 14 days of opening a non-UK bank account. Courts would be able to strike limited partnerships off the register to prevent misuse where it is in the public interest to do so. A limit would be introduced on the number of directorships any one individual can hold. Companies House would be allowed to query and possibly reject applications to use a company name to deter misuse of company names and addresses.
Implementation. This would be effected through primary legislation and would involve significant changes to Companies House systems and staffing, with a likely increase in the fees levied by Companies House.
The government acknowledges in the consultation document that the extent of the changes required means the proposed reforms would take ‘some years’ to deliver.
BEIS is consulting until 5 August 2019 on changes to the information companies would be required to disclose to Companies House, with increased checks and improved exchange of intelligence with law enforcement bodies to prevent abuse of the system for money laundering and tax evasion.
Announcing the consultation, the minister for small business, consumers and corporate responsibility at BEIS, Kelly Tolhurst, said: ‘While the overwhelming majority of UK corporates operate wholly legitimately, concerns have been expressed about the misuse of UK corporate entities, the filing of false information on the companies register held at Companies House and the use of innocent people’s information on the register to commit fraud and other acts of harm.’
‘In the last three years there have been almost 10,000 complaints to Companies House from people concerned about their personal details, with worries including fraud and misuse of personal details topping the list’, the minister added.
The document proposes a range of reforms aimed at limiting the risks of misuse, set out under the following five broad headings.
Knowing who is setting up, managing and controlling companies. This would allow Companies House to verify the identity of individuals who have a key role in companies, including directors, people with significant control and those who file information, possibly extending to information about shareholders, which could be achieved by requiring banks, accountants, company formation agents and others covered by the Money Laundering Regulations 2017 to share the results of their customer due diligence with Companies House.
Improving the accuracy and usability of data on the companies register. Companies House powers would be extended to query and seek corroboration on information before it is entered on the register and make it easier to remove inaccurate information. Improvements around delivery of annual accounts to Companies House would introduce a more uniform format for the submission of accounts to enable automated checks and improved statistical analysis. The document proposes to limit the number of times companies would be allowed to delay submitting accounts by shortening their accounting period. Collection of some further basic information would enable third parties to obtain information more easily where there is an exemption from ‘people with significant control’ requirements. The government proposes to maintain the current rules permitting records of dissolved companies to be retained for 20 years.
Protecting personal information. This would allow collection of certain personal information about directors to be suppressed, including the ‘day’ element of their date of birth, changes in gender and signatures.
Ensuring compliance, sharing intelligence, and other measures to deter abuse of corporate entities. Companies House would be allowed to cross-check data on UK corporate bodies against data held by other government and private sector bodies, such as banks, accountancy and legal firms, and company formation agents. The government is considering introduction of a new requirement for UK companies to notify Companies House within 14 days of opening a non-UK bank account. Courts would be able to strike limited partnerships off the register to prevent misuse where it is in the public interest to do so. A limit would be introduced on the number of directorships any one individual can hold. Companies House would be allowed to query and possibly reject applications to use a company name to deter misuse of company names and addresses.
Implementation. This would be effected through primary legislation and would involve significant changes to Companies House systems and staffing, with a likely increase in the fees levied by Companies House.
The government acknowledges in the consultation document that the extent of the changes required means the proposed reforms would take ‘some years’ to deliver.
