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Department for Business – Transparency & Trust

On 15 July, the Department for Business, Innovation & Skills published a discussion paper, ‘Transparency & Trust: Enhancing the transparency of UK company ownership and increasing trust in UK business’. 
This paper came as a direct result of the G8 Summit last month, where tax evasion, money laundering and corporate abuse were high on the agenda. It is clear from recent press coverage that the public is concerned about big companies which make big profits, but do not pay very much in the way of tax. A further concern is the lack of transparency in business. Who really owns, manages and controls the way these large entities are run? 
The recommendations in the BIS paper try to address these complex issues. The main proposal is the creation of a new central registry of ‘beneficial owners’ of all UK companies. A ‘beneficial owner’ would be someone with at least 25% of the company’s shares, and would also take into account their voting rights or control in any other sense. The aim is to promote complete transparency in UK business. It is not yet clear whether this registry would be made public, or only available to tax and law enforcement authorities.  
Nonetheless, there is still the issue that this registry would only apply to companies incorporated in the UK. This means that big companies incorporated in countries such as the United States and Ireland but operating in the UK would escape its reach, unless they also had a UK subsidiary.   
There are many more recommendations in the paper, which can be seen here

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