The 11.5 million leaked documents which make up the now infamous 'Panama Papers' lifted the lid on tax havens, money laundering avoidance and other questionable corporate activity.
Closer to home, today sees the 'go-live-date' of new regulations designed to provide more transparency about the true ownership of UK companies.
Under these new legal requirements, UK companies must now identify and then maintain a register of people who have significant control over the company ('PSCs'). Briefly, a PSC is a person or entity who:
directly or indirectly holds more than 25% of the shares in the company; or
has more than 25% of the voting rights; or
has the right to appoint or remove a majority of the board of directors of the company; or
has the right to exercise, or actually exercises, significant influence or control over the company.
The rules contain certain anomalies which require UK companies to drill down into their shareholding and control structure and report annually on the public record. Therefore they need to be carefully considered.
Some have described the introduction of these regulations as simply more red tape. There is no doubt that they provide yet another administrative task for the already burdened directors of UK companies. They also significantly affect the confidentiality of share ownership in the UK, as the ultimate ownership structure is now made clear; another unpopular move with some.
Like it or not, the intention is that transparency is the best policy. Will this instil a new culture of trust in UK business, or will more complex webs simply be created with a view to hiding what is going on?
If you would like advice on PSCs and how they may affect your company please contact Isla MacLennan on 0131 247 1255 or at firstname.lastname@example.org