Essential Corporate News – Week ending May 4, 2018

Welcome to Essential Corporate News, our weekly news service covering the latest developments in the UK corporate world.

The Companies (Disclosure of Address) Amendment Regulations 2018 (2018 Regulations) were made on April 25, 2018 and came into effect on April 26, 2018.  They amend the Companies (Disclosure of Address) Regulations 2009 (2009 Regulations).

The 2009 Regulations enabled a director whose residential address was already publicly available on the register kept by the Registrar of Companies as at October 1, 2009 to apply to make that residential address unavailable for public inspection if the director could show that disclosure of that address was likely to create a serious risk that the director or a person living with the director would be subject to violence or intimidation.

The 2018 Regulations amend the 2009 Regulations to remove the serious risk of violence or intimidation test and to allow applications in relation to residential address information filed before January 1, 2003.  They also apply in relation to other situations where a residential address may have been placed on the register and shareholders can make an application for suppression of residential address information without having to satisfy the test of serious risk of violence or intimidation.

Applications can be made by an individual to remove an address from the register at Companies House, by a company to remove the addresses of its members or former members and by a person who registers a charge to remove an address delivered for the purpose of registering the charge.

The application fee is £55 for each document containing an address to be suppressed and as well as amending the 2009 Regulations, the 2018 Regulations amend the Limited Liability Partnerships Application of Companies Act 2006 (Regulations 2009) and the Scottish Partnerships (Register of People with Significant Control) Regulations 2017.

(The Companies (Disclosure of Address) Amendment Regulations 2018, 25.04.18)

On April 30, 2018, the Department for Business, Energy & Industrial Strategy (BEIS) published a consultation paper setting out a number of potential reforms to the law governing limited partnerships.

In response to evidence of a significant increase in registrations of limited partnerships in Scotland, and allegations that Scottish limited partnerships were being used for elicit purposes, BEIS published a call for evidence which closed in March 2017. The aim of the call for evidence was to gain a better understanding of how limited partnerships are being used and to determine if the legislative framework that underpins the regime remains fit for purpose.

This consultation paper is the Government’s response to the call for evidence. It summarises the evidence received and sets out a number options for reform of the legal framework for limited partnerships.

The consultation document is structured as follows:

• Chapter One sets out the history and use and misuse of limited partnerships, as informed by the call for evidence, and summarises some of the important uses for limited partnerships in the modern economy.
• Chapter Two sets out a proposal that would require all presenters (those seeking to register a limited partnership) to be registered with an anti-money laundering supervisory body, and to provide evidence that they are.
• Chapter Three sets out two alternative options to ensure limited partnerships maintain some connection with the UK. The first would require a limited partnership’s principal place of business to remain in the UK. The alternative would allow a limited partnership’s principal place of business to move outside the UK, but introduce a requirement for a service address to be maintained within the UK.
• Chapter Four seeks views on whether reporting requirements for limited partnerships should be increased and brought more into line with those currently required of limited companies.
• Chapter Five sets out proposals to give the Registrar of Companies powers to strike off the register limited partnerships that fall within the scope of certain conditions.

Next steps

Responses to the consultation paper are requested by July 23, 2018. The consultation paper notes that the potential reforms will require primary legislation and, depending on the outcome of the consultation, it is the Government’s intention to legislate as soon as Parliamentary time allows.

(BEIS, Limited partnerships – Consultation on reform of limited partnership law, 30.04.18)

On April 26, 2018 Private Equity Reporting Group (PERG) published an updated version of its guide which aims to assist private equity owned portfolio companies to improve the transparency and disclosure in their financial and narrative reporting by highlighting good practice examples.

The guidance illustrates how the Guidelines for Disclosure and Transparency in Private Equity (Guidelines), last revised in July 2014, should be implemented and it shares examples of good practice to encourage the adoption of good practice across all aspects of reporting. The guidance makes the following observations:

• Discussion of past performance should include forward-looking information.
• Risks should not be considered in isolation as this tends to provide a static, boilerplate discussion.
• Reporting should link together strategy, risk and key performance indicators coherently whilst telling a story and integration is the key to achieving corporate reporting which is strategically focused throughout.
• The focus on disclosures for employee matters, human rights and gender reporting has substantially increased and there is a need to add greater transparency over policies companies have in these areas.
• Transparency of ownership is a significant theme in how stakeholders assess businesses they work with and potential implications of this.

These observations reflect the trends identified from both the review of companies’ performance against the Guidelines but also feedback from wider considerations of the direction of corporate reporting.

(PERG, Improving transparency and disclosure, 26.04.18)