News: The rules of company registration are scheduled to change in the UK

Back in early May 2019, the United Kingdom government announced that starting from May 5, public discussions of the draft Act on the new rules of the local Register of Companies (eng. Companies House) will be initiated. According to British media, the main goal of the Registry reform is to establish a “strong, transparent and attractive business environment” in the country.

To achieve the desired result, the British government proposes to strengthen the role of the Register of Companies in combating economic crimes, expanding its powers to collect and verify information about companies and partnerships, and also introduce measures to improve the exchange of this information. Government proposals are set out in a consultation document posted for review on the official website of the Register.

According to the document, the reform is planned to be carried out in four areas:

1. Increasing the transparency of information about who creates, manages and exercises control over legal entities. It is proposed to expand the list of disclosed information, as well as to increase the degree of their reliability by tightening the requirements for verifying the identity of persons playing a vital role in the creation and follow-up activities of legal entities:

• participants/shareholders in companies;
• partners in partnerships;
• directors and other officers;
• persons with substantial control (eng. People with Significant Control, abbr.PSCs);
• the persons are directly submitting information to the Register on behalf of the legal entity.

2. Improving the quality and convenience of using the Registry of Companies. It is proposed to enter information into it only after receiving supporting documents. Besides, it is planned to significantly simplify the process of deleting invalid data from the Registry.

3. Protection of personal data. This part describes the measures for organizing the storage and provision of access to information from the Register of Companies, as well as ways to prevent the unauthorized disclosure of sensitive non-public information.

4. Ensuring compliance with established requirements, the exchange of information and other measures to combat the illegal use of legal entities. Here, the main proposal is to introduce cross-exchange of information between the Register of Companies and other public and private institutions/organizations. The government believes that this will effectively identify inconsistencies and other informational anomalies that indicate possible illegal activities. A public discussion of the reform of the British Register of Companies will last until August 5, 2019. Upon completion of this process, government proposals (together with comments received from experts and members of the public) will be submitted to parliament for adoption in the form of amendments to existing legislation.

Given the scale of future innovations, there is a suggestion that these changes will also subject to revision a vast array of sub-legal regulations governing the registration and activities of legal entities in the UK.

Law and Trust International provides an opportunity to register a company in the UK. To learn about the cost and features of registration, please contact our lawyers.