Measures to help improve corporate transparency and strengthen director disqualification laws have been outlined with the publication of a discussion paper by the Department of Business, Innovation and Skills.
Key proposals on which the government is seeking feedback include:
– Creating a registry of the beneficial owners of UK companies. A beneficial owner would be defined as an individual with an interest in over 25% of a company’s shares or voting rights or who otherwise exercises control over how the company is run. The paper considers the type of information to be provided to the registry, when it should be updated and if it should be made public;
– Introducing new statutory powers to enable companies to identify beneficial owners and obligations on beneficial owners to notify companies of their interests;
– Banning the creation of new bearer shares (which do not require the identity of the holder to be entered in the company’s publicly available register of members) and requiring existing bearer shares to be converted to ordinary registered shares;
– Prohibiting nominee and corporate directors;
– Amending directors’ statutory duties for key sectors such as banking and allowing sector regulators to disqualify directors in the relevant or all sectors;
– Amending the Company Directors Disqualification Act 1986 to allow additional factors to be taken into account in disqualification proceedings and to enable the UK disqualification of directors guilty of misconduct in relation to overseas companies;
– Helping creditors receive compensation where a director has been fraudulent or reckless;
– Increasing or removing the time limit for disqualification proceedings in insolvency cases;
– Offering education or training to disqualified directors;
The consultation closes on 16 September 2013. For further advice please contact our Company & Commercial lawyers at firstname.lastname@example.org.