Britain’s bid to curtail its rotten shell companies gets a weak, anemic legal remedy
ECONOMIC CRIME BILL
Britain has had a shell company problem for years. Although we tend to think of shell companies as registered in somewhere tropical — Nevis, the Seychelles, etc. — the big scandals have tended to track back to places that are damper and more temperate, and few places are as damp as the United Kingdom, or as scandal-prone as its corporate registry, Companies House.
Then last week we got — drum roll, please — the “biggest proposed reform to the role of Companies House in 170 years.” This has not gained as much attention as it might have done, probably thanks to the new government’s remarkable straight-out-the-gate achievement of driving the pound down to its lowest level in 1,200 years, since the days when one of its kings was Offa of Mercia.
But the reforms are potentially a big deal, so what’s in the new Economic Crime and Corporate Transparency Bill (and apologies to American readers: British bills have really boring names and ugly acronyms)? The most important measure is that Companies House will be transformed from a library, which just accepts information and publishes it, to an active verifier of information.
I sat with a friend a couple of weeks ago to show her how easy it was to register a company in the U.K., since she didn’t believe it was indeed as easy as creating an account on a badly regulated social media site. In her case, there was no option for “tax consultant” in the drop-down menu, so we called her a “taxidermist” but still got the registration finished in 10 minutes or so. If this bill is passed, that won’t be possible anymore, and nor will — supposedly — the kind of dodgy limited partnerships registered anonymously in tax havens that moved billions out of Russia.