Company Ownership Public Register

Company Ownership Public Register.

The Government has confirmed that it is to launch a public register of exactly who owns any company.

Companies are established and owned by shareholders and directors are appointed to run the company.  A company secretary is also appointed to deal with the formal side of company ownership and reporting to tax authorities and Companies House.

Most limited companies in the UK have simple structures where the shareholders are also directors and one of them will also be appointed secretary.

It has been a common tactic for many years for some companies to  mask who owns the company by having “corporate directors” or indeed establish offshore companies in countries that allow anonymous directors.

This means that it can be difficult to trace who owns a company and who is benefitting from profits, gains and dividends.

Comment

As part of the globally agreed move to crack down on tax avoidance, the major advanced economic groups, the so called G8 and G20, have already agreed in principal to crack down on anonymous directors.

The UK rules will force all UK registered firms to disclose the exact names of parties that have a controlling share/own 25% of more of the shares in a company.

We think this is a pointless exercise, information is already available from Companies House as to the ownership of a firm.  In doing this, many websites already publish basic information on companies, ownership and cash balances.  We cannot see what will change.

The real issue is tackling offshore companies owning shares in UK based companies.  The UK government cannot force an offshore jurisdiction to change its laws.

We accept that the use of non-transparent corporate structures means tax evasion is rife and for some poorer countries, it means much needed revenue is channelled offshore and not paid into a developing nation’s own economy, meaning greater poverty.

In addition, many offshore company formation locations require not taxes to be paid or accounts to be submitted provided no trade is carried on in the country that the company is based.  The real issue is the British, US and French Government tackling their overseas dependency and protectorates.  You know where we mean: Gibraltar, Isle of Man, Caribbean Islands, Panama, Belize, even Delaware and Nevada in the USA.  It is these that promote privacy of ownership and asset protection with very low taxes or no taxes and low reporting requirements.

The UK making disclosures on ownership for UK registered companies will mean absolutely nothing unless pressure can be brought to bear on banking groups regarding signatories on bank accounts and anonymous company director shares and indeed “bearer shares” where ownership of a company is only proved by that fact that you have a share certificate in your hand as there are no listed directors.