Government announces company beneficial ownership register will be available to the public

Government announces company beneficial ownership register will be available to the public

On 31st October, the government announced that its planned company beneficial ownership register is to be made publicly accessible.

This means that the details of anyone who has a beneficial interest in more than 25% of the issued share capital of a company will be available to the public at Companies House. There will be limited exemptions from this public disclosure, namely where it is necessary to protect individuals whose safety might otherwise be put at risk.

Companies House currently only holds information concerning the legal owners of shares in companies. Thus, where a shareholder wishes (for whatever reason) to remain anonymous, that shareholder can simply arrange for someone else to hold the legal title to those shares on trust for them. This secrecy has, in some instances, been found to act as a cover for criminal activity.

The register is intended to increase transparency with the aim of reducing the scope for criminals to use companies for illegal purposes, such as tax evasion and money laundering.

Legislation has not yet been finalised and further details of how the register will work are due to be announced in the new year.

You can find out more about the company beneficial ownership register here.

What do I think?

Companies House will rely on companies to provide details of beneficial owners of their shares, which will presumably be captured on a company’s annual return. Whilst well intentioned, it seems unlikely that the new register will deter criminals who are intent on hiding their beneficial shareholding interests from doing so, given companies will be relying on the legal owners of their shares to disclose the identity of any beneficial owner of the shares held by them with no obvious way of verifying this independently.

The disclosure obligation is also only to apply in respect of 25%+ beneficial interests. It will, however, increase transparency and make life a little harder for those seeking to hide their identity for illegitimate reasons.

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