Sneaking into the middle pages and the rear columns of the worthier organs comes news of the Company Law Reform Bill.
This bill would allow company shareholders names to be kept secret. Its stated purpose: to protect shareholders in biotechnology companies from threats and violence from animal rights protesters.
A company that can persuade the courts that its “register of members” will be used for an “improper purpose” will no longer be required to make the list public on request. “Improper” is not defined. The test will be whether or not the list of names is to be used to organise what the courts judge to be “harassment”. “Harassment” is also not defined. I’m sure lawyers even less clever than Ruthie could come up with a range of meanings for a fee.
Lucky that this law would never be used by say someone simply wishing to keep their investments secret, or god forbid, possibly a means of secretly funding political parties. I’m sure the merest possibility of its use for those purposes hasn’t even so much as speculated at crossing anyones mind.
But you can do that anyway with a nominee arrangement.
Hmm, but isn’t it still possible to have a go at tracing the owner via the nominee?
You can use nominee accounts however they have substantial deficiencies: you don’t get to vote, don’t get the company reports as of right and don’t get the perks (a significant issue for vanity shares such as Eurotunnel et. al.) so some form of legislation was needed to bolster the options.
I’ve not read the bill but I’d like to know what the provisions are for concealing shareholder data - is it just that they can withhold unless it is wanted for a ‘proper purpose’ as one suggestion was?
Somehow professional nominees holding for very wealthy private client types usually end up voting the way the beneficial owner would like them to… But I take the point. That’s still going to be the preferred way of making it difficult to find your investments though.
Ruthie: the beneficial owner won’t be findable through the members’ register (s360 CA 1985 says that doesn’t get entered) but with a bit of luck and a following wind you can track things, yes. Takes work and costs money though. Partly depends where the nominees are as well and how easy it is to get information out of them. One of the first things I worked on (as a devilling exercise cum general dogsbody) involved playing a game of hunt the beneficial interest through fourteen different jurisdictions. Which was frankly pretty good evidence of actual dodginess as it was somewhat overkill for tax-related cleverness.
Once upon a time Ruthie did a lot of fraud and company crime, and therefore became quite adept at the game of hunt the stash. It takes time, money and determination, but if you really want to find something you’ll get there in the end. I’m amused at your journey through 14 different jurisdictions. The best and most effective scams are usually the simplest.
Ah: apols for attempting to teach you to suck eggs then, didn’t know you’d done that kind of work. Part of my practice is the civil side of such things.
That was a fun journey actually.
“The best and most effective scams are usually the simplest.”
Professional or personal experience speaking here Ruthie?
Lucky that this law would never be used by say someone simply wishing to keep their investments secret, or god forbid, possibly a means of secretly funding political parties. I’m sure the merest possibilty of its use for those purposes hasn’t even so much as speculated at crossing anyones mind.
I don’t know how anyone could even begin to imagine the exploitation of company law for bad reasons. If I didn’t know any better, I would say you’re just a cynical lawyer.
Still, at least the legislators actually did something proactive in terms of reform; the original draft late last year was just a re-codification of the mess that is the CA 1985.
Uh if you think the CA 1985 is a mess try wading through the deluge of legislation that us criminal lawyers have had heaped upon us over the last 5 years. CA 1985 was at least at valiant attempt at codification. Ruthie recalls that the whole of company law used to come in a handy one volume tome. OK it was the size of a breeze block, but at least you knew that the answer you were looking for had to be in there, somewhere. And compared to the Dickensian drafting of modern legislation, it was a model of clarity.