Economic Crime and Corporate Transparency Bill: Improving transparency of company ownership

This article forms part of a series looking at the measures to be introduced by the Economic Crime and Corporate Transparency Bill (“the Bill”), which intends to deliver a suite of wider-ranging reforms to tackle economic crime and improve transparency over corporate entities.

This article focusses on changes to be made via the Bill and through regulations to improve the transparency of company ownership.

What is proposed?

The government is introducing measures in the Bill to improve transparency requirements to increase the usefulness of the information held on the shareholders of UK companies. The measures will mean that users of the companies register will have more certainty on who they are doing business with, build confidence in the integrity of the companies register, and prevent bad actors from exploiting the register.

The measures to be introduced include:

• a requirement for companies to record the full names of shareholders in their registers;
• a requirement for private companies, and traded companies where shareholders hold at least 5% of the issued shares of any class of the company, to provide a one-off full shareholder list; and
• a power to make regulations to collect more information about shareholders.

The government will also do the following through regulations made under the Companies Act 2006:

• collect and display more information from companies claiming an exemption from the requirement to provide details of their People with Significant Control (PSCs), including the reason for the exemption; and
• collect and display the conditions satisfied to which allow a Relevant Legal Entity (RLE) to be recorded as a PSC.

When will these measures come into effect?

From the date the relevant measures in the Bill come into force:

• companies must provide a full list of shareholder names via the next confirmation statement which falls due; and
• companies incorporating will have to provide full names for subscribers or guarantors.

From the date the relevant measures in regulations come into force:

• existing companies with a RLE must provide the information via the next confirmation statement due;
• existing companies claiming an exemption must provide the information via the next confirmation statement due;
• companies incorporating and stating their PSC is a RLE must provide the information as part of the incorporation application; and
• companies notifying Companies House that a RLE is a PSC must provide the information as part of the notice.