A law firm has expressed reservations about new government rules for SMEs. In a bid to improve corporate transparency, UK businesses will be expected to keep a register of all figures with significant control over a company from January 2016.
This new rule forms part of the Small Business, Enterprise and Employment Act.
Boodle Hatfield has highlighted a series of privacy concerns relating to these plans. Geoffrey Todd, Partner at the firm, said:
“The new regime raises some issues as to how confidential information is used and that may alarm individuals who value their privacy and are sensitive to how much the public know about companies they are involved in and the values of those interests.
“Individuals whose affairs are entirely legitimate but who want to retain privacy may find this new legislation makes it easier for others to pry into their affairs. This may particularly concern celebrities or other well-known public figures.”
While acknowledging that there will be some scope for SMEs to refuse requests for information, Mr Todd says it “remains to be seen” whether or not the statutory provisions will provide enough protection in sensitive cases.
Why are these government rules for UK businesses being introduced?
Increasing global corporate transparency is the agenda behind the government’s plan.
It’s believed that having better knowledge over who owns and runs businesses will prevent illegal practices such as smaller companies being used for tax evasion, terrorist financing and money laundering.
Managers, top decision makers and anybody with more than a 25% share in a company will need to be listed on the PSC register. Required information includes the individual’s name, date of birth, nationality, address and details of their interest in the company.
This will be publicly accessible information.
What do you make of these new government rules? Are you worried about privacy issues or do you think this a necessary move?
Let us know your thoughts over on Twitter @TheInsuranceOct.