The Government BEIS Department have recently proposed a number of important changes to the way Companies House operates in a public consultation entitled “Corporate Transparency and Register Reform” (see https://tinyurl.com/yysf9gdn ). Here’s a brief summary of the main points:
This consultation will be of interest to anyone who is a director of a private or a public company, or a major shareholder in such a company (i.e. those People with Significant Control). Even directors of the smallest companies could be affected.
A major proposal is to verify the identity of directors and to collect more information on them (although not their email address apparently, which I have suggested be added). This can now be done very quickly and at minimal cost electronically using various verification services (e.g. listed GB Group in which I hold shares). This will help to prevent fraud and they even hope to be able to link all directorships in various companies together. For example, this might make it easier to track the past activities and record of directors which even in small listed companies can be very informative as to their competence and reliability.
They propose to continue to retain the records of dissolved companies for 20 years which many investors consider important and is useful for investigators of all kinds.
They also plan some changes to improve the protection of personal information held at Companies House. Bearing in mind that there are well over 6 million records of directorships, with significant personal information, this is clearly important.
For public company investors there are two significant proposals:
1 – Improved digital tagging standards for accounts, which might make it simpler to provide information services based on them.
2 – A possible cap on the number of directorships any one person can hold. There are common complaints about “overboarding” where directors take on too many roles. I have suggested a maximum of 5 in public companies, with some possible exemptions, should be imposed.
In general the proposals seem eminently sensible and I suggest they be supported on the whole. You can see my personal detailed comments in a response submitted to the consultation here: https://tinyurl.com/y6j9u4do
Roger Lawson (Twitter: https://twitter.com/RogerWLawson )
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