Law firms to be caught by new transparency rulesRules forcing partnerships and unlisted companies to register names of those “with significant control” over their businesses come into force today, in a move ministers hope will boost transparency around UK commerce.
Lawyers warned that ignoring the regime – implemented by the Small Business, Enterprise and Employment Act 2015 – could have damaging consequences.
“Failing to comply with a statutory notice or to comply with the general obligation to provide information is an offence,” said Iain Wright, a partner in the London office of Morgan Lewis, a Boston-based international law firm. He pointed out that failure to comply could be viewed as a criminal offence and companies could be fined ,with individuals potentially risking imprisonment.
Wright added that individual executives would not be able to decline being named. He said any person failing to comply with a statutory notice served by a company could be hit with a restrictions notice, which would result in dividends being withheld from the individual.
The lawyer said that companies and limited liability partnerships “will need to put in place the necessary internal systems to deal with the new regime and should be taking reasonable steps to identify people with significant control and relevant legal entities and preparing their register”.
From June 30, UK companies will have to provide the information on their registers to Companies House when they file annual confirmation statements.
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