Lighting up dark corners in the business world

 

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When I came to office I promised to shine a light in the dark corners of the business world. One of these corners is the secrecy that often surrounds ultimate ownership.

Most UK companies abide by the rules. But the minority who don’t threaten the trust on which good business practice is based.

All UK companies have a register that lists who directly holds their shares. However, this doesn’t necessarily identify the ultimate beneficial owner – the individual who really owns and controls the company.   

There is currently no duty on companies to hold this information as a matter of course. Individuals can hide their interest in a company to facilitate crime – from money laundering to tax evasion. The inherent complexity of company structures can make it difficult for tax authorities and law enforcement agencies to uncover wrongdoing. It is clear that there is a direct link between a lack of transparency in the ownership of companies and illicit activity.

Today, we are announcing that the UK is proceeding with an open public register – something I and my party have long campaigned for. When we implement this, we will be among the global leaders in terms of corporate transparency and accountability of our companies. The PM made this a key objective at this year's G8 summit, and succeeded in persuading his counterparts to join the UK in committing to an ambitious set of reforms to ensure that we know who really owns and controls our companies.

Concerns have been raised about the right to privacy and the impact on UK competitiveness and individual safety where a company has been engaged in controversial activities, such as animal testing. So we will permit limited exemptions from public disclosure to protect those who might genuinely otherwise be at serious risk of harm.

Greater transparency of company ownership and control should help to expose bad practice and make it harder for criminals to operate. It is right and in our interest not just to lead by rhetoric, but to take practical concrete actions that increase confidence in the UK as a clean and trusted place to do business.

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