Business Beat
Business Beat WHITE PAPER PROPOSES NEW POWERS FOR COMPANIES HOUSE Company registration and regulation changes will mean less fraud and more paperwork
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gainst the backdrop of the Russian invasion of Ukraine, the government recently enacted the Economic Crime (Transparency and Enforcement) Act 2022. At the same time, it published a white paper, corporate transparency and register reform, in an attempt to increase the suite of powers that its agencies possess in tackling attempts to thwart sanctions, money launder and commit fraud. Long before the invasion, the government outlined its intention to reform Companies House to clamp down on fraud and money laundering activities. With this in mind, the white paper was given a particular focus on changing the way in which UK companies are registered and regulated.
CURRENT POSITION OF COMPANIES HOUSE Currently, anyone may apply to Companies House to incorporate a company and nominate its director(s). All that is needed is a UK address and one individual over 16 who is prepared to act as a director; UK PLC often celebrates how easy it is to set up business in the UK. The checks undertaken are not particularly stringent. The registrar at Companies House has
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limited powers to query any information provided to it or to remove any information from the register. And this has led to a lack of transparency as to the real ownership of companies on the register, including those that are used to launder money from illicit gains. At the present, only the courts are empowered to demand changes to the register such as ordering a company to change its name.
THE WHITE PAPER The government’s white paper proposes reforms to Companies House by transforming its powers and processes: Powers of the registrar: Taking the first, the powers of the registrar, the white paper
outlines a new statutory role for the registrar to promote and maintain the integrity of the register of companies. And to enforce this, the registrar would be granted a new suite of powers including the power to query information, both prior to and post registration if it is apparent that information may be fraudulent, suspicious or could impact on the integrity of the register. This power will also allow the registrar to reject documentation where there is a reason to query the accuracy of information provided. Another is the power to impose sanctions. Here, if a company fails to respond to a query or provide sufficient evidence in response to a query, the registrar will have the power to
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