Looking beyond Companies House
Currently, there are 4.4 million active companies on the Companies House register. It may come as a surprise that the UK is one of the easiest countries to set up a company, only taking 24 hours and costing just £12. Companies House currently does not verify the information submitted to its platform and typically does not amend or remove data on the register.
The makeup of Companies House has subsequently led to many concerns surrounding the accuracy and security of data hosted on the register. It is at risk of false information, duplication and the misspelling of director names, and vulnerable to criminal abuse such as setting up fake ‘shell companies’ to facilitate the ‘cleaning’ of dirty money. One notable campaign was by the anti-corruption campaign group Global Witness which investigated PSCs (person of significant control – the person who owns the registered company). In 2018 they found that 4,000 PSCs listed were below the age of two, and one had not yet been born.
While the government reacted to ongoing concerns about Companies House in 2019 by opening up a consultation to improve the system and made a series of recommendations, in its current state it is still too slow to match the frequency and complexity of M&A deals in the UK market.
Companies House will still continue to play a valuable role in the registry of business information, however the powers necessary to adequately investigate current companies on the system notwithstanding ones added each day are likely to take years to implement and will require legislation to support it.
Read full article: www.globalbankingandfinance.com/how-to-improve-corporate-transparency-with-ai/