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Business Matters

BIS Consultation on transparency

BIS - which is short for Department for Business Innovation and Skills - is consulting on a range of new measures designed to increase confidence in the corporate structures (limited companies) which operate in the UK.

Some changes are probably more welcome than others for example disqualification of directors who behave inapproriately; and an end to nominee directors and some other technical matters.

Most directors will also welcome an end to the Annual Return, the AR01 form which on the one hand gives a snapshot of the company at the same date every year and shows who the shareholders and directors are. The plan is that as Directors must notify Companies House legally within a few weeks of any change taking place, that the Annual return is now no longer required.

So it may well be an end to one form but you will still have to submit all of the others that are currently required and no doubt fines and penalties will follow for late submission or - the more awful consequence - of the company being struck off for failure to keep the record up to date.

Oh and there is one more tricky one coming up, Companies will require to keep a record of beneficial shareholdings. The new proposals would require all companies (including private companies) “to identify the beneficial owners of any block of shares representing more than 25% of the voting rights or shares in the company; or of any block of shares which would give the beneficial owner equivalent control over the company in any other way”. There is no doubt that this is going to happen as the government committed to it at the last G8 Summit. The remaining question is how much will need to be made publicly available?

As with all good change - like the end of the Annual Return - there is always something worse (needing more reporting and more paperwork) that takes its place. So reducing red tape maybe a good goal for the UK government to aim for. Nature hates a vacuum and always aims to fill it and it seems that the vacuum left by the Annual Returnis being filled with ever more increased public accountability.

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