Corporate Transparency and Register Reform

Since 2019, the BVCA has responded to a number of consultations and participated in a BEIS expert panel looking at reforms to the powers of Companies House and corporate transparency requirements. These form part of wide-ranging reforms to the powers and role of Companies House announced by Government in order to improve business transactions and tackle economic crime.

The initial consultation sought views on: verification of the identity of directors before they are validly appointed; collection of more detailed information about shareholders; Companies House having more discretion to query information on the register; and capping the number of directorships that can be held by an individual. The government has since confirmed that they are not taking forward detail proposals in respect of the verification of shareholders and capping directorships.

More recent consultations covered: improving the quality and value of financial information on the UK companies register; implementing a ban on corporate directors; and changing the powers of the registrar.

Our feedback covered concerns about the practicalities of introducing these changes and we wait for final proposals to be published near the end of the year.  

In 2022 the Government passed into law the Economic Crime (Transparency and Enforcement) Act. The Act creates a public register detailing the beneficial ownership of overseas entities owning UK property. Progress of the legislation has been slow but Russia’s invasion of the Ukraine has led to its acceleration as part of a drive to ensure that assets held by sanctioned individuals can be controlled and prevented. The Act requires an overseas entity that owns/is entitled to own UK property to register on the new Companies House register unless an exemption applies.

The second Bill on this subject was published in late September and is making its way through Parliament. It legislates for areas consulted on previously (see below) which includes Limited Partnerships and Corporate Transparency.

• Limited Partnerships: This BEIS factsheet provides further information on new transparency requirements for Limited Partnerships (LPs) and the ability for the Register of Companies to deregister LPs which are dissolved, which are no longer carrying on business or where a court determines that it is in the public interest to do so. The BVCA has engaged with BEIS for a number of years on the LP reform proposals, particularly on the strike-off procedure so that the right balance is struck between cleaning up the register and maintaining the usefulness of LPs as investment fund vehicles.
• Corporate Transparency: Factsheets covering new requirements for companies are available here. As part of the Expert Panel, the BVCA has been engaged on these reforms and will continue to work on the Bill as it makes its way through Parliament.

PSC Register

The Small Business, Enterprise and Employment Act 2015 introduced a requirement for UK companies and LLPs to keep a public register of people who have significant control (“PSC register”) over them, with the aim of increasing transparency on who ultimately owns and controls UK them.

The PSC register came into effect on 6 April 2016 and the BVCA has been working with the (then) Department for Business Innovation and Skills and now the Department for Business, Energy and Industry Strategy to ensure the requirements are workable for the private equity and venture capital industry. The Act requires UK companies and LLPS to maintain a PSC register and to make the contents of the register public. Individuals can be indirect PSCs by controlling and holding a majority stake of the company through a legal entity. Legal entities must also be registered where it would have been a PSC, had it been an individual.

The BVCA has kept its members informed of the development of the PSC register via our technical publications and published a briefing in March 2016 (see below) that set out key areas for members to consider when producing a PSC register.