Economic Crime and Corporate Transparency Bill
Tuesday 4th July 2023
(1 year, 4 months ago)
Lords ChamberEconomic Crime and Corporate Transparency Act 2023 View all Economic Crime and Corporate Transparency Act 2023 Debates Read Hansard Text Watch Debate Read Debate Ministerial Extracts Amendment Paper: HL Bill 156-I Marshalled list for Third Reading - (3 Jul 2023)
Lord Johnson of Lainston
That the Bill now be read a third time.
The Minister of State, Department for Business and Trade (Lord Johnson of Lainston) (Con)
My Lords, following the expedited passage of the Economic Crime (Transparency and Enforcement) Act 2022, my noble friend Lord Callanan assured the devolved Governments that they would be closely engaged throughout the passage of this second Bill. Our officials have been sure to keep their counterparts in the devolved Administrations informed and we have met a number of times at ministerial level to discuss key issues.
As noble Lords will be aware, the Northern Ireland Civil Service is facing a number of challenges in the absence of the Northern Ireland Assembly and the subsequent lack of an Executive, one of which being that it is not possible to engage the legislative consent process for this or any other Bill. Given the importance of this Bill, the official level of support for its provisions and the desire to ensure a united response against economic crime, we will proceed to legislate for the whole of the UK without the formal legislative consent of the Northern Ireland Assembly. We have written to the Northern Ireland Permanent Secretaries to keep them informed.
However, I am pleased to confirm that on 20 June the Welsh Senedd voted to grant legislative consent to the Bill. Last week, on the Scottish Parliament’s last sitting day before the Summer Recess, the Scottish Parliament also voted to grant legislative consent to the Bill. I thank colleagues and officials in all three Administrations for the constructive way in which they have worked during the development and passage of this Bill to design measures that will be as effective as possible in tackling economic crime across all parts of the United Kingdom.
Amendment 1
Lord Johnson of Lainston
“Duty to deliver information about exemption from Part 21A
In section 853H of the Companies Act 2006 (duty to deliver information about exemption from Part 21A), after subsection (2) insert—“(2A) The statement under subsection (2) must specify— (a) whether the company falls within the description specified in section 790B(1)(a) or a description specified in regulations under section 790B(1)(b), and(b) if it falls within a description specified in regulations under section 790B(1)(b), what that description is.””Member’s explanatory statement
A company that is exempt from Part 21A of the Companies Act 2006 (information about persons with significant control) has to confirm that it is exempt in each confirmation statement. This new clause would require it to explain why. See the Minister's undertaking at report stage (20 June, col. 149)
Lord Johnson of Lainston (Con)
My Lords, I will now speak briefly to the government amendments, which deliver on the undertakings I made on Report, first in response to concerns raised about the robustness of the people with significant control—PSC—framework and secondly to close a gap in the register of overseas entities information requirements. I thank the noble Lord, Lord Vaux of Harrowden, in particular, for raising these issues. I also welcome the contributions of my noble friend Lord Agnew of Oulton and of the noble Lords, Lord Fox, Lord Ponsonby of Shulbrede, Lord Cromwell and Lord Clement-Jones.
The majority of the amendments fall into the former category of the PSC framework. I reassure noble Lords that, although the number of amendments is higher than we might have liked to table at Third Reading, the majority are minor consequential or tidying-up amendments, and a lot of the new material is in fact a refashioning of existing rules to make them work in the new context of a central register, rather than locally held PSC registers. These amendments improve this by requiring companies to collect additional and more useful information, and by improving the mechanisms through which companies collect the information and report it to Companies House.
Currently, companies must record various “additional matters” in the PSC register. The Bill as drafted removed the regulation-making power through which these additional matters are prescribed. Amendments 26 and 32 preserve those requirements in the context of a centrally held PSC register. Amendment 26 means that a company will notify the registrar if the company knows, or has cause to believe, that a person has become a PSC but the company has not yet had confirmation from them. Amendment 32 means that a company must give notice to the registrar if it knows or has cause to believe that the company has no PSC. This will provide a hook for the registrar to query the statement that a company has no PSC, if she has intelligence to suggest otherwise.
The Bill as drafted removed an important measure to ensure that personal information is protected appropriately. Amendments 14, 17, 20, 22 and 25 ensure that protection mechanisms remain in place, otherwise a person who is at serious risk of violence or intimidation could be reported as a PSC without ever knowing, meaning that they may not have had the opportunity to apply for their personal information not to be displayed publicly.
To improve accuracy and transparency, and to make it easier to monitor and prosecute non-compliance, Amendment 1 requires a company that is exempt from the PSC requirements to explain why it is exempt in each confirmation statement. Amendment 15 improves existing provisions of the Companies Act 2006 which require companies to investigate and obtain information about their PSCs.
Amendments 33 and 34 widen the scope of a regulation- making power in the Bill so that the power can amend relevant parts of the Companies Act 2006 and to make consequential amendments to other parts of the Act. This is to ensure that the legislation is coherent, by avoiding having similar provisions spread across primary and secondary legislation.
Amendment 39 creates a reasonable excuse defence relating to the offence of failing to comply with information notices. This aligns the drafting of the offences with other similar offences.
All other amendments are consequential. I hope that noble Lords will support these amendments.
I turn to Amendment 9. On Report, the noble Lord, Lord Vaux of Harrowden, tabled an amendment seeking to close a gap in the register of overseas entities’ information requirements relating to overseas entities acting as nominees. The Government agreed that this gap exists, and I thank the noble Lord and Transparency International for bringing it to our attention. The amendment tabled by the noble Lord was not quite right, but I hope that this amendment addresses his concerns. It amends Schedule 1 to the Economic Crime Transparency and Enforcement Act 2022 to ensure that, where there is a nominee relationship, this is declared. It then inserts a new definition of beneficial ownership into Schedule 2 to the 2022 Act: “registrable beneficial owners”. I hope that noble Lords will welcome this amendment and agree that it closes the gap that we discussed on Report. I beg to move.
Lord Vaux of Harrowden (CB)
My Lords, I thank the Minister for these amendments. As he said, I described at Report the loophole in the register of overseas entities that allows people to hide the true ownership of UK properties through nominee arrangements. As the Minister described, he tabled Amendment 9, as he undertook to do, which effectively closes that loophole. I am not sure what conclusion to take from the fact that my original 11-line amendment has turned into one that runs to three pages—it presumably says something about my amendment drafting skills—but I am most grateful.
The other amendments that the Minister tabled relate to the register of persons with significant control. These new amendments tighten the rules and will improve the ability to identify PSCs. In particular, I welcome the requirement for the information to be filed on a centrally held register, rather than locally held registers managed by the companies themselves. The requirement to explain why a company is exempt from the PSC requirements is also an important improvement.
I was slightly confused as to what happens if a company has become aware that it has a PSC but the PSC has not yet confirmed their status or information. Amendment 20 appears to deal with that situation; it requires the company to notify the registrar if it knows, or has cause to believe, that a person has become a registrable person but has not yet had confirmation. However, that seems to conflict with the explanatory statement to Amendment 17:
“This means that a company will only need to notify the registrar of a person with significant control if the person has confirmed their status and information about them”.
Amendment 20 says that the registrar must be notified of an unconfirmed PSC but Amendment 17, or at least the explanatory statement to it, seems to say exactly the opposite. Can the Minister please explain which is right and how the two work together? More importantly, can he reassure me that a PSC will not be able to avoid being notified to the registrar simply by failing to confirm their status or information.
I put on record that, while I welcome and support the amendments, I do not believe that they deal with the problem of nominee shareholders not having to declare themselves as such. The new amendments are not an alternative to the amendment that the House passed on Report that required shareholders to state whether or not they are acting as a nominee, and if so who for. I hope that the Government will continue to consider that amendment and look at it favourably in the other place, or at the very least meet with me and others to see whether we can find a workable compromise. It should not be possible for bad actors to hide behind nominees, and there should be consequences for those who act as nominees to conceal such bad actors.
I am extremely grateful to the Minister and his officials for their helpful and constructive engagement throughout this process; they have been extremely generous with their time. In particular, I thank them for having addressed a number of issues, including the one we have just talked about, throughout the progress of the Bill. The level of engagement from all Ministers involved has been exemplary—if only all Bills were managed so constructively. I also thank all noble Lords who have been so generous in their support of the various amendments that I have proposed. When the Bill started in this House, it was generally seen to be a good Bill, and I think that it emerges from this House in even better shape.
Lord Fox (LD)
My Lords, there are times when your Lordships’ House is confronted with so many Third Reading amendments that it can be somewhat irksome, but this is not one of those occasions. This is a useful and helpful response from the Minister and his team to the debate we had on Report, and for that I thank them.
I reinforce the point made by the noble Lord, Lord Vaux, that these amendments do not replace those that we passed on Report, which I similarly hope the Minister and his team will continue to consider as we go forward.
Transparency of ownership and the registration of overseas entities are important to this. The point we have made on a number of occasions about keeping the whole Bill under review and looking at how it works once it becomes an Act will be vital. It is clear that we cannot second-guess all the reactions we will get out there, so having the fluidity and agility to deal with that will be important.
Although it is slightly confusing, I will offer my thanks and congratulations at this point, so that I do not do so twice. First, I congratulate the Ministers on getting legislative consent so smoothly. For many of the Bills that I have been working on of late, legislative consent never seems to come. However, unlike many of those Bills, this is one where all the House agreed on its objectives, so all we were discussing were the ways in which we could achieve those objectives. In that regard, I thank the Ministers for the great amount of time and effort they have devoted to listening to, and having meetings with, Members across your Lordships’ House and for seeking ways of accommodating our helpful suggestions. Particular thanks are due to the noble Lords, Lord Johnson and Lord Sharpe, and the noble and learned Lord, Lord Bellamy, as well as the noble Lord, Lord Goldsmith, and the noble Earl, Lord Minto, who made appearances in Grand Committee.
Similarly, the whole Bill team, and organisations such as Companies House, have given up a lot of their time to speak with us, so thanks should be given to them. There have been many contributions from the Cross Benches and the Benches opposite. I will not single out anyone for praise, except to say that it has been a great pleasure working with everyone on the Bill; I felt that we were all pulling in the same direction.
I also thank the noble Lord, Lord Ponsonby, and the noble Baroness, Lady Blake, for their camaraderie on the Bill. I thank my noble friends Lady Bowles, Lady Kramer, Lord Clement-Jones, Lord Wallace of Saltaire, Lord Thomas of Gresford and Lord Oates on our Benches. Finally, thanks go to Sarah Pughe in our Whips Office, who has kept us all in order.
Baroness Blake of Leeds (Lab)
My Lords, I thank the Minister for his letter on the amendments tabled at Third Reading; it was very much appreciated. All of us involved fully understand the importance of transparency of ownership in Companies House and the register of overseas entities, issues we have revisited many times throughout consideration of the Bill.
Ensuring that complex, opaque structures cannot be built to hide economic wrongdoing is central to what we need this Bill to do. I appreciate the approaches taken in working with colleagues across the House to make sure that this important and complex Bill is as effective as possible at preventing economic crime and enforcing consequences for those who commit or facilitate it. However, as we have heard, other areas of the Bill need to be changed, as this House has agreed and as the noble Lord, Lord Vaux, noted, particularly through his own amendments. I hope that Ministers will also hear those points as the Bill heads back to our colleagues in the other place.
I thank all the officials, whose diligence, work, unfailing response and willingness to talk to us throughout has been exemplary. I thank the Ministers for their patience and commitment to working with all parties across the House, in particular the noble Lords, Lord Johnson and Lord Sharpe, and the noble and learned Lord, Lord Bellamy. We are very grateful for that commitment. I give special thanks to Clare Scally, who works in our office. Her tireless support and endless patience working through the various amendments is to be commended. She has kept us on the straight and narrow going through the various changes, which have been welcomed, in the main. I particularly thank my noble friends who have engaged in the debate, especially my noble friends Lord Ponsonby and Lord Coaker, who have given so much of their insight and expertise to help us move forward.
As we have heard today, there is no doubt that this Bill is in a better place than when we started. However, all of us, hand on heart, know that there is still much more to do, particularly in tackling the sheer scale of economic crime in this country. Many people who were not aware of that now are, and I believe that the demand for action will grow. I hope that our improvements to the Bill will have a swift impact on its legislative journey and really help the many victims who must remain at the heart of our considerations.
Lord Johnson of Lainston (Con)
My Lords, before I conclude, I would just like to cover the comments made by the noble Lord, Lord Vaux. If my memory is correct, Amendment 17 prevents the publication of a PSC whose identity has not been verified, so there is no conflict between the two. It is only right that people whose identity has not been verified is published. What is important about these additional amendments is that they ensure that you have to ascertain that you have no PSCs, or if the PSC has not been identified then the registrar is able to make further inquiries. They are not inconsistent and make a sound change to the Bill very much along the lines the noble Lord was recommending in the first place.
I thank the Opposition Front-Benchers, in particular the noble Lords, Lord Coaker and Lord Ponsonby of Shulbrede, the noble Baroness, Lady Blake of Leeds—a formidable Front Bench, if I may say—and the noble Lord, Lord Fox. I thank them for their engagement and constructive scrutiny of the Bill, as well as the enormous amount of time they dedicated to the various meetings ahead of each set of debates. It was a very valuable collaboration and I believe together in this House, we have formed a significant piece of legislation that all the peoples of the United Kingdom will benefit from.
I thank some of the other key contributors to this Bill. Many other noble Lords have been instrumental in the improvements made during its passage through this House, including the noble Lords, Lord Vaux of Harrowden and Lord Alton of Liverpool. The noble Lord, Lord Vaux, and I spent many hours working through this Bill, and if ever asked to point to the value of this great Chamber, it is exactly those constructive debates that I would point to. I am extremely grateful for his input and strong sense of collaboration.
Thanks must also go to my noble friends Lady Stowell of Beeston, Lady Morgan of Coates, Lord Leigh of Hurley—I have rightly described him as a “guru of finance”— Lord Sandhurst, and others for their input and constructive challenge. I also thank my noble friend Lord Agnew of Oulton, who has also engaged extremely constructively with me during this process, and my noble and learned friend Lord Garnier. Over recent months, we have had robust discussions and debates and I genuinely thank them for their engagement.
I must also thank the Whip, my noble friend Lord Evans of Rainow; the formidable team of Whips and officials; and my ministerial colleagues—my noble friends Lord Sharpe of Epsom and Lord Minto, and my noble and learned friend Lord Bellamy—who have all done an excellent job when representing this Bill in the House in all debates over the last few months. The Bill is significant both in size and scope, spanning several departments.
This brings me to all the officials working across multiple departments behind the scenes supporting the ministerial team as we engaged and debated with noble Lords on the detail of the Bill; I extend true personal thanks and the thanks of my noble friend Lord Sharpe. I thank Louise Smyth, the registrar of Companies House, who will be taking many of the actions we are passing through this House in order to make Companies House function more effectively. She and her entire team have engaged consistently throughout this process, and we wish her the greatest of success in implementing this dramatic programme.
I thank the analysis, company law and corporate transparency team in my own Department for Business and Trade, headed especially ably by the deputy director, Matt Ray, and his head of policy, Steve Webster. I thank the criminal finances and asset recovery unit in the Home Office, excellently led by Maria Hannan. I thank Paul Rowlands, Lucy Chisholm, the hard-working legal teams in both departments—I can certainly attest to that—and the expert drafters from the Office of the Parliamentary Counsel, particularly Diggory Bailey and Camilla Grundy. I thank my private office team, in particular, Emily Tranter and Simon Moore, who have supported me so much over these last few months. Finally, I thank the Bill team: Tom Ball, the Bill manager, and his fantastic team of Nicola Wallace, Anna Gray, Corrie Monaghan, Tim Holland, Sophie Curry, Monique Sidhu, Michael Tam and Carolin Grassmann. Everyone involved has demonstrated impressive levels of expertise, and I think I can speak for all Ministers when I say that we felt in safe hands. I am grateful for their proactive, patient and professional support throughout.
Finally, I thank the House authorities for managing the large number of amendments made in this House, and the parliamentary staff, the doorkeepers and clerks for their professionalism and continued support to the Bill and to your Lordships’ House.
To conclude, this Bill is a milestone piece of legislation, which will deliver major reforms to the framework for corporate criminal liability, improving the ability to hold corporations liable in their own right for economic crimes; the first serious reform of limited partnership law since 1907; the most significant changes to our system for setting up and maintaining companies since the 1850s; the first national legislation from any Government to take action against SLAPPs; and the legislative underpinning to tackle the new threats facing us in 21st century through action on crypto assets and improved data-sharing.
Economic crime affects every single one of us in different ways and at different scales. This Government are determined to tackle economic crime and drive out dirty money, protecting British citizens. We are ensuring that public agencies, law enforcement and the private sector have the tools needed to deliver greater protections for members of the public and businesses. As I have said on multiple occasions, the Government have been determined throughout that the Bill strikes the right balance in all areas between tackling criminality and avoiding undue burdens on the law-abiding majority. I remain keener than ever to get this important legislation on the statute books, and look forward to implementing the reforms that it contains when we reach Royal Assent. I beg to move.
Lord Johnson of Lainston
Member’s explanatory statement
This is consequential on my amendment to Schedule 2, page 222, line 31. See the Minister's undertaking at report stage (20 June, col. 149).
Member’s explanatory statement
This is consequential on my amendment to Schedule 2, page 225, line 17 inserting a new section 790LCB into the Companies Act 2006. See the Minister's undertaking at report stage (20 June, col. 149).
Member’s explanatory statement
This is consequential on my amendment to Schedule 2, page 225, line 17 inserting a new section 790LCB into the Companies Act 2006. See the Minister's undertaking at report stage (20 June, col. 149).
Lord Johnson of Lainston
Member’s explanatory statement
Clauses 68, 136 and 166 ensure that certain documents are withheld from public inspection. My amendments to those Clauses protect similar documents delivered under regulations under section 1067A(5)(a) and (6) of the CA 2006. My amendments are therefore consequential on those regulation-making powers, which were added at earlier stages.
Member’s explanatory statement
See the explanatory statement to my first amendment to Clause 68.
Lord Johnson of Lainston
Member’s explanatory statement
See the explanatory statement to my first amendment to Clause 68.
Member’s explanatory statement
See the explanatory statement to my first amendment to Clause 68.
Lord Johnson of Lainston
“Registrable beneficial owners: nominees
(1) The Economic Crime (Transparency and Enforcement) Act 2022 is amended as follows.(2) In Schedule 1 (required information)—(a) in paragraph 3(1), for paragraphs (e) and (f) substitute—“(e) whether the individual is a registrable beneficial owner by virtue of paragraph 2(1) of Schedule 2 or paragraph 2(2) of that Schedule;(f) if the individual is a registrable beneficial owner by virtue of paragraph 2(1) of Schedule 2—(i) a statement as to which of the conditions in paragraph 6 of that Schedule is met and why, and(ii) a statement as to whether that condition is met by virtue of the individual being a trustee;(fa) if the individual is a registrable beneficial owner by virtue of paragraph 2(2) of Schedule 2, a statement as to which of the conditions in paragraph 6A of that Schedule is met and why;”;(b) in paragraph 4, for sub-paragraph (f) substitute—“(f) whether the government or public authority is a registrable beneficial owner by virtue of paragraph 4(1) of Schedule 2 or paragraph 4(2) of that Schedule;(fa) if the government or public authority is a registrable beneficial owner by virtue of paragraph 4(1) of Schedule 2, a statement as to which of the conditions in paragraph 6 of that Schedule is met and why;(fb) if the government or public authority is a registrable beneficial owner by virtue of paragraph 4(2) of Schedule 2, a statement as to which of the conditions in paragraph 6A of that Schedule is met and why;”;(c) in paragraph 5(1), for paragraphs (g) and (h) substitute—“(g) whether the entity is a registrable beneficial owner by virtue of paragraph 3(1) of Schedule 2 or paragraph 3(2) of that Schedule;(h) if the entity is a registrable beneficial owner by virtue of paragraph 3(1) of Schedule 2—(i) a statement as to which of the conditions in paragraph 6 of that Schedule is met and why, and(ii) a statement as to whether that condition is met by virtue of the entity being a trustee;(ha) if the entity is a registrable beneficial owner by virtue of paragraph 3(2) of Schedule 2, a statement as to which of the conditions in paragraph 6A of that Schedule is met and why;”. (3) In Schedule 2 (registrable beneficial owners)—(a) in paragraph 2—(i) the existing text becomes sub-paragraph (1);(ii) in paragraph (a) of that sub-paragraph, for “(see Part 2)” substitute “by virtue of paragraph 6”;(iii) after that sub-paragraph insert—“(2) An individual is also a “registrable beneficial owner” in relation to an overseas entity if the individual is treated as a beneficial owner of the overseas entity by virtue of paragraph 6A.”;(b) in paragraph 3—(i) the existing text becomes sub-paragraph (1);(ii) in paragraph (a) of that sub-paragraph, for “(see Part 2)” substitute “by virtue of paragraph 6”;(iii) after that sub-paragraph insert—“(2) A legal entity other than a government or public authority is also a “registrable beneficial owner” in relation to an overseas entity if it is treated as a beneficial owner of the overseas entity by virtue of paragraph 6A.”;(c) in paragraph 4—(i) the existing text becomes sub-paragraph (1);(ii) in that sub-paragraph, for “(see Part 2)” substitute “by virtue of paragraph 6”;(iii) after that sub-paragraph insert—“(2) A government or public authority is also a “registrable beneficial owner” in relation to an overseas entity if it is treated as a beneficial owner of the overseas entity by virtue of paragraph 6A.”;(d) after paragraph 6 insert—“Persons treated as beneficial owners where entity holds land as nominee6A_ A person (“X”) is to be treated as a beneficial owner of an overseas entity (“Y”) if one or more of the following conditions are met.Y holds land in England or Wales as nominee for XCondition 1 is that Y—(a) is registered in the register of title kept under the Land Registration Act 2002 as the proprietor of a qualifying estate within the meaning of Schedule 4A to that Act,(b) became so registered in pursuance of an application made on or after 1 January 1999, and(c) holds the qualifying estate as nominee for—(i) X, or(ii) an entity of which X is a beneficial owner by virtue of paragraph 6.Y holds land in Scotland as nominee for XCondition 2 is that—(a) Y—(i) holds an interest in land by virtue of being entered, on or after 8 December 2014, as proprietor in the proprietorship section of the title sheet for a plot of land that is registered in the Land Register of Scotland,(ii) is, in relation to a lease that was recorded in the General Register of Sasines or registered in the Land Register of Scotland before that date, by virtue of an assignation of the lease registered in the Land Register of Scotland on or after that date, the tenant under the lease, or(iii) is the tenant under a lease that was registered in the Land Register of Scotland on or after that date, and(b) Y holds the interest in land referred to in paragraph (a)(i), (ii) or (iii) as nominee for— (i) X, or(ii) an entity of which X is a beneficial owner by virtue of paragraph 6.Y holds land in Northern Ireland as nominee for XCondition 3 is that Y—(a) is registered in the register kept under the Land Registration Act (Northern Ireland) 1970 (c. 18 (N.I.)) as the owner of a qualifying estate within the meaning of Schedule 8A to that Act,(b) became so registered on or after the day on which that Schedule came into force, and(c) holds the qualifying estate as nominee for—(i) X, or(ii) an entity of which X is a beneficial owner by virtue of paragraph 6.”;(e) in paragraph 8, for “paragraphs 2(b) and 3(c)” substitute “paragraphs 2(1)(b) and 3(1)(c)”.”Member’s explanatory statement
This amendment means that where an overseas entity holds certain interests in land as a nominee for another person that person is treated as a beneficial owner for the purposes of the register of overseas entity. It also deals with less direct relationships. See the Minister's undertaking at report stage (20 June, col. 187).
Lord Johnson of Lainston
Member’s explanatory statement
See the explanatory statement to my first amendment to Clause 68.
Member’s explanatory statement
See the explanatory statement to my first amendment to Clause 68.
Lord Johnson of Lainston
Member’s explanatory statement
This amendment corrects a cross-reference.
Lord Johnson of Lainston
“9_ In section 790C (key terms), omit subsection (10).”Member’s explanatory statement
This is consequential on my other amendments to Schedule 2 and leaves out a definition that is no longer used. See the Minister's undertaking at report stage (20 June, col. 149).
“9A_ After section 790C insert—“790CA References to “confirmation” etc of informationFor the purposes of this Part a company has had confirmation of—(a) a person’s status as a registrable person or a registrable relevant legal entity in relation to the company,(b) the required particulars of a person (see section 790K),(c) any other information about a person,if the person has supplied that information to the company whether or not in pursuance of any duty imposed by this Part (and references to a company obtaining confirmation of information are to be read accordingly).””Member’s explanatory statement
This defines what is meant by “confirmation” for the purposes of my other amendments to Schedule 2, which mean that a company which knows of a person with significant control etc only has to notify the registrar if it has had confirmation from the person. See the Minister's undertaking at report stage (20 June, col. 149).
“10_ For sections 790D and 790E substitute—“790CB Duty to find out about persons with significant controlA company to which this Part applies must take reasonable steps to find out if there is anyone who is a registrable person or a registrable relevant legal entity in relation to the company and, if so, to identify them.790D Company’s duty to give notices to persons with significant control(1) A company to which this Part applies must give a notice to a person under this section if—(a) the company knows or has cause to believe that the person is a registrable person or a registrable relevant legal entity in relation to the company, but(b) the company has not had confirmation of the person’s status as a registrable person or registrable relevant legal entity or has not had confirmation of all of the required particulars of the person (see section 790K).(2) The notice must require the person—(a) to inform the company whether the person is a registrable person or a registrable relevant legal entity in relation to the company, and(b) if they are, to give the company all of the required particulars of the person (see section 790K).(3) The notice must require the person to whom it is given to comply with the notice by no later than the end of the period of one month beginning with the day on which it is given.(4) The company must give the notice—(a) as soon as reasonably practicable after the company becomes subject to the duty to give a notice under this section, and(b) in any event before the end of the period of 14 days beginning with the day on which the company becomes so subject.(5) A company is not required to give a notice under this section to a person if— (a) the application for the registration of the company contained a statement of initial significant control naming the person as someone who would, on the company’s incorporation, become a registrable person or a registrable relevant legal entity in relation to the company, and(b) the company has no cause to believe that at any time since its incorporation the person has ceased to be a registrable person or a registrable relevant legal entity in relation to the company.(6) The Secretary of State may by regulations make further provision about the giving of notices under this section, including provision about their form and content and the manner in which they must be given.(7) Regulations under subsection (6) are subject to negative resolution procedure.790DA Obtaining information from third parties(1) A company to which this Part applies may give a notice to a person under this section if it knows or has cause to believe that the person—(a) knows the identity of someone who falls within subsection (2), or(b) knows the identity of someone likely to have that knowledge.(2) The persons who fall within this subsection are—(a) a registrable person in relation to the company;(b) a relevant legal entity in relation to the company;(c) an entity which would be a relevant legal entity in relation to the company but for the fact that section 790C(6)(b) does not apply in respect of it.(3) A company must give a notice under subsection (1) to a person (“a third party”) if the company—(a) knows or has cause to believe that a person is a registrable person or a registrable relevant legal entity in relation to the company (“a suspected PSC”),(b) is under a duty to give the suspected PSC a notice under section 790D but does not have the information that it needs in order to contact them, and(c) knows or has cause to believe that the third party—(i) knows the identity of the suspected PSC, or(ii) knows the identity of someone likely to have that knowledge.(4) A notice under subsection (1) must require the person to whom it is given (“the recipient”)—(a) to inform the company whether the recipient knows the identity of any person who—(i) falls within subsection (2), or(ii) is likely to know the identity of anyone who falls within subsection (2), and(b) if the recipient does, to give the company any information within the recipient’s knowledge that would allow the company to contact each such person.(5) The notice must require the person to whom it is given to comply with the notice by no later than the end of the period of one month beginning with the day on which it is given.(6) A person to whom a notice under subsection (1) is given is not required by that notice to disclose any information in respect of which a claim to legal professional privilege (in Scotland, to confidentiality of communications) could be maintained in legal proceedings.(7) The Secretary of State may by regulations make further provision about the giving of notices under this section, including provision about their form and content and the manner in which they must be given. (8) Regulations under subsection (7) are subject to negative resolution procedure.(9) In this section a reference to knowing the identity of a person includes knowing information from which that person can be identified.790E Company’s duty to find out about changes in PSC information(1) This section applies if a company—(a) knows or has cause to believe that there has been a change in the required particulars of a registrable person or a registrable relevant legal entity in relation to the company (see section 790K), but(b) has not had confirmation that the change has occurred or has not had confirmation of all of the information that the company would need to include in a notice of the change under section 790LC(1) or 790LCA(1).(2) The company must give the person a notice requiring the person—(a) to inform the company whether the change has occurred, and(b) if it has, to give the company the information that the company would need to include in a notice of the change under section 790LC(1) or 790LCA (1).(3) The notice must require the person to whom it is given to comply with the notice by no later than the end of the period of one month beginning with the day on which it is given.(4) The company must give the notice—(a) as soon as reasonably practicable after the company becomes subject to the duty to give a notice under subsection (2), and(b) in any event before the end of the period of 14 days beginning with the day on which the company becomes so subject.(5) The Secretary of State may by regulations make further provision about the giving of notices under this section, including provision about their form and content and the manner in which they must be given.(6) Regulations under subsection (5) are subject to negative resolution procedure.790EA Company’s duty to find out about persons ceasing to be PSCs(1) This section applies if a company—(a) knows or has cause to believe that a person has ceased to be a registrable person or a registrable relevant legal entity in relation to the company, but(b) has not had confirmation that the person has ceased to be a registrable person or a registrable relevant legal entity in relation to the company or has not had confirmation of the date on which the person so ceased.(2) The company must give the person a notice requiring the person—(a) to inform the company whether the person has ceased to be a registrable person or a registrable relevant legal entity in relation to the company, and(b) if the person has, to inform the company of the date on which the person so ceased.(3) The notice must require the person to whom it is given to comply with the notice by no later than the end of the period of one month beginning with the day on which it is given.(4) The company must give the notice—(a) as soon as reasonably practicable after the company becomes subject to the duty under subsection (2), and (b) in any event before the end of the period of 14 days beginning with the day on which the company becomes so subject.(5) The Secretary of State may by regulations make further provision about the giving of notices under this section, including provision about their form and content and the manner in which they must be given.(6) Regulations under subsection (5) are subject to negative resolution procedure.790EB Company’s duty to notify failure to comply with notices(1) A company must notify the registrar if a person fails to comply with a notice given by the company under section 790D, 790DA, 790E or 790EA within the period specified in it.(2) The notice must be given within the period of 14 days beginning with end of the period specified in the notice under section 790D, 790DA, 790E or 790EA .790EC Company’s duty to notify of late compliance with notices(1) A company must notify the registrar if a person who has failed to comply with a notice given by the company under section 790D, 790DA, 790E or 790EA within the period specified in it subsequently complies.(2) The notice must be given within the period of 14 days beginning with the day on which the person complied with the notice under section 790D, 790DA, 790E or 790EA .”11_ In section 790F (failure by company to comply with information duties), for subsection (1) substitute—“(1) If a company fails, without reasonable excuse, to comply with a duty under section 790CB, 790D, 790DA(3), 790E, 790EA, 790EB or 790EC to take steps or give a notice, an offence is committed by—(a) the company, and(b) every officer of the company who is in default.”12_ For sections 790G and 790H substitute—“790G Duty to notify company on becoming PSC(1) This section applies to a person if—(a) the person knows that they are a registrable person or a registrable relevant legal entity in relation to a company,(b) the material in the register that is available for public inspection does not indicate the person’s status as a registrable person or registrable relevant legal entity in relation to the company, and(c) the person—(i) has not informed the company of the person’s status as a registrable person or registrable relevant legal entity in relation to the company, or(ii) has not given the company all of the required particulars of the person (see section 790K).(2) The person must—(a) inform the company of the person’s status as a registrable person or registrable relevant legal entity in relation to the company, and(b) give the company the required particulars (see section 790K).(3) The person must comply with the duty in subsection (2) before the end of the period of one month beginning with the day on which the conditions in subsection (1) are met.790H Duty to notify company of changes in PSC information(1) This section applies to a person if— (a) the person knows that they are a registrable person or a registrable relevant legal entity in relation to a company,(b) there has been a change in the required particulars of the person (see section 790K) and the person knows that to be the case, and(c) the person has not informed the company of the change or has not given the company all of the information that the company would need to include in a notice of the change under section 790LC(1) or 790LCA(1).(2) The person must—(a) inform the company of the change, and(b) give the company the information that the company would need to include in a notice of the change under section 790LC(1) or 790LCA(1).(3) The person must comply with the duty in subsection (2) before the end of the period of one month beginning with the day on which the conditions in subsection (1) are met.790HA Duty to notify company of ceasing to be a PSC(1) This section applies to a person if—(a) the person knows that they have ceased to be a registrable person or a registrable relevant legal entity in relation to a company,(b) the material in the register that is available for public inspection does not indicate the person as having ceased to be a registrable person or a registrable relevant legal entity in relation to a company, and(c) the person has not informed the company of having ceased to be a registrable person or a registrable relevant legal entity in relation to the company or has not informed the company of the date on which the person so ceased.(2) The person must inform the company—(a) that the person has ceased to be a registrable person or a registrable relevant legal entity in relation to the company, and(b) of the date on which the person so ceased.(3) The person must comply with the duty in subsection (2) before the end of the period of one month beginning with the day on which the conditions in subsection (1) are met.”12A_ In section 790I (enforcement of disclosure requirements), for the words from “a notice” to the end substitute “—(a) a notice under section 790D, 790DA, 790E or 790EA, or(b) a duty under section 790G, 790H or 790HA.”13_ In section 790J (power to make exemptions)—(a) in subsection (2)(a), for “790D(2) or 790E” substitute “ 790D, 790E or 790EA”;(b) in subsection (2)(c), for “790D(5)” substitute “790DA”;(c) in subsection (2)(d), for “and 790H” substitute “, 790H and 790HA”;(d) in subsection (2)(e) for “section 790M” substitute “any of sections 12A, 790LA, 790LBA, 790LC, 790LCA, 790LCB, 790LD, 790LDA”.”Member’s explanatory statement
This amendment changes provisions in Part 21A of the Companies Act 2006 that are aimed at ensuring that a company has information about persons with significant control. It is connected with the other amendments to that Part made by or proposed to be made by the Bill. See the Minister's undertaking at report stage (20 June, col. 149).
Member’s explanatory statement
This adjusts a heading in the material inserted into the Companies Act 2006, in consequence of my other amendments to Schedule 2. See the Minister's undertaking at report stage (20 June, col. 149).
“790LA Duty to notify registrar of confirmed persons with significant control(1) A company must give a notice to the registrar if it has had confirmation of—(a) a person’s status as a registrable person or a registrable relevant legal entity in relation to the company, and(b) the required particulars of the person (see section 790K).(2) A notice under subsection (1) must contain a statement of the required particulars.(3) A notice under subsection (1) must be given within the period of 14 days beginning with the day on which the company had confirmation as mentioned in that subsection.(4) A company is not required to give a notice under this section in relation to a person if—(a) the application for the registration of the company contained a statement of initial significant control naming the person as someone who would, on the company’s incorporation, become a registrable person or a registrable relevant legal entity in relation to the company, and(b) the company has no cause to believe that at any time since its incorporation the person has ceased to be a registrable person or a registrable relevant legal entity in relation to the company.(5) Nothing in section 126 (notice of trusts not receivable by registrar) affects the duty to give a notice under this section (or the receipt of that notice by the registrar).”Member’s explanatory statement
This means that a company will only need to notify the registrar of a person with significant control if the person has confirmed their status and information about them. See the Minister's undertaking at report stage (20 June, col. 149).
Member’s explanatory statement
This is consequential on my amendment to Schedule 2, page 224, lines 6 to 27. See the Minister's undertaking at report stage (20 June, col. 149).
Member’s explanatory statement
This is consequential on my amendment to Schedule 2, page 224, lines 6 to 27. See the Minister's undertaking at report stage (20 June, col. 149).
“790LBA Duty to notify registrar of unconfirmed persons with significant control(1) A company must give a notice to the registrar if—(a) it knows or has cause to believe that a person has become a registrable person or a registrable relevant legal entity in relation to the company, but(b) it has not yet had confirmation as mentioned in section 790LA (1).(2) The notice must state that fact.(3) A notice under subsection (1) must be given within the period of 14 days beginning with the day on which the company first knows or has cause to believe that the person has become a registrable person or a registrable relevant legal entity in relation to the company. (4) Nothing in this section requires a company, on its incorporation, to give a notice in relation to a person included in the statement of initial significant control under section 12A.”Member’s explanatory statement
This requires a company to notify the registrar if it knows or has cause to believe that someone has become a person with significant control but that fact, or the person’s required particulars, have not been confirmed. See the Minister's undertaking at report stage (20 June, col. 149).
“Duty to notify registrar of changes in required particulars”Member’s explanatory statement
This adds a new heading in the run of sections inserted into the Companies Act 2006, in consequence of my other amendments to Schedule 2. See the Minister's undertaking at report stage (20 June, col. 149).
(a) has had confirmation that there has been a change in the required particulars of a registrable person, or a registrable relevant legal entity, in relation to the company (see section 790K), and(a) has had confirmation of how the required particulars have changed and the date on which they changed.”Member’s explanatory statement
This means that a company only has to notify the registrar of a change in the required particulars of a person with significant control if the person has confirmed details of the change to the company. See the Minister's undertaking at report stage (20 June, col. 149).
“(3) A notice under subsection (1) must be given within the period of 14 days beginning with the day on which the company had confirmation as mentioned in that subsection.”Member’s explanatory statement
This is consequential on my amendment to Schedule 2, page 225, line 4. See the Minister's undertaking at report stage (20 June, col. 149).
“Duty to notify registrar of person ceasing to be person with significant control etc”Member’s explanatory statement
This adds a new heading in the run of sections inserted into the Companies Act 2006, in consequence of my other amendments to Schedule 2. See the Minister's undertaking at report stage (20 June, col. 149).
“790LCA Duty to notify of pre-incorporation changes in required particulars(1) A company must give a notice to the registrar if it—(a) has had confirmation that there was a pre-incorporation change in the required particulars of a proposed PSC (see section 790K), and(b) has had confirmation of how the required particulars have changed and the date on which they changed.(2) But a company is not required to give a notice under subsection (1) in respect of a person if it has given a notice under section 790LD in respect of the person.(3) A notice under subsection (1) must state—(a) the change in the required particulars, and(b) the date on which the change occurred. (4) A notice under subsection (1) must be given within the period of 14 days beginning with the day on which the company had confirmation as mentioned in that subsection.(5) In this section—“pre-incorporation change” means a change that occurred—(a) after the application for the registration of the company was delivered to the registrar, but(b) before the company was incorporated;“proposed PSC”, in relation to a company, means a person who was named in a statement under section 12A(1)(a) as a person who would, on the company’s incorporation, become a registrable person or registrable relevant legal entity in relation to the company.”Member’s explanatory statement
This moves material currently in new section 790LD of the Companies Act 2006 and means that a company will only need to notify the registrar of pre-incorporation changes in the particulars of a person with significant control if the changes have been confirmed by the person. See the Minister's undertaking at report stage (20 June, col. 149).
“790LCB Duty to notify registrar when person ceases to have significant control(1) A company must give a notice to the registrar if it—(a) has had confirmation that a person has ceased to be a registrable person or a registrable relevant legal entity in relation to it, and(b) has had confirmation of the date on which the person so ceased.(2) A notice under subsection (1) must state—(a) the person’s name and service address, and(b) the date on which the person ceased to be a registrable person or a registrable relevant legal entity in relation to the company.(3) A notice under subsection (1) must be given within the period of 14 days beginning with the day on which the company had confirmation as mentioned in that subsection.”Member’s explanatory statement
This is consequential on my amendment to Schedule 2, page 224, lines 6 to 27. See the Minister's undertaking at report stage (20 June, col. 149).
Member’s explanatory statement
This amendment is consequential on my amendment to Schedule 2, page 225, line 17 inserting a new 790LCA into the Companies Act 2006. See the Minister's undertaking at report stage (20 June, col. 149).
Member’s explanatory statement
This changes the language of new section 790LD(1) of the Companies Act 2006 to conform with the language of the other notification duties in relation to persons with significant control (as amended). See the Minister's undertaking at report stage (20 June, col. 149).
Member’s explanatory statement
This is consequential on my amendment to Schedule 2, page 225, line 17 inserting a new 790LCA into the Companies Act 2006. See the Minister's undertaking at report stage (20 June, col. 149).
Member’s explanatory statement
This is consequential on my amendment to Schedule 2, page 225, line 19. See the Minister's undertaking at report stage (20 June, col. 149).
Member’s explanatory statement
This is consequential on my amendment to Schedule 2, page 225, line 17 inserting a new 790LCA into the Companies Act 2006. See the Minister's undertaking at report stage (20 June, col. 149).
“790LDA Duty to notify registrar if company ceases to have persons with significant control(1) A company must give a notice to the registrar if it knows or has cause to believe that—(a) there has at some time been a person who is a registrable person or registrable relevant legal entity in relation to the company, and(b) there has ceased to be anyone who is a registrable person or registrable relevant legal entity in relation to the company.(2) A notice under subsection (1) must —(a) state that the company has that knowledge or cause to believe, and(b) specify the date on which the company first had that knowledge or cause to believe.(3) A notice under subsection (1) must be given within the period of 14 days beginning with the day on which the company first had the knowledge or cause to believe mentioned in that subsection.”Member’s explanatory statement
This imposes a duty on a company to notify the registrar if there ceases to be any persons with significant control in relation to the company. See the Minister's undertaking at report stage (20 June, col. 149).
(b) compliance with Chapter 2 by the company or any person to whom the company has given a notice under that Chapter (including provision requiring a company to provide the registrar with a copy of any such notice, whether on request or otherwise).”Member’s explanatory statement
This expands the regulation-making power to require a company to provide further information in relation to persons with significant control. See the Minister's undertaking at report stage (20 June, col. 149).
“(1A) The provision that may be made by regulations under subsection (1) includes provision amending this Part.(1B) The consequential provision that may be made by regulations under subsection (1) by virtue of section 1292(1) also includes provision amending any other provision of this Act.”Member’s explanatory statement
This would allow regulations under new section 790LE of the Companies Act 2006 (power to create further duties to notify information about persons with significant control) to amend the relevant Part of the Act and make consequential amendments to other parts of the Act. See the Minister's undertaking at report stage (20 June, col. 149).
Member’s explanatory statement
This is consequential on my amendment to Schedule 2, page 225, line 2 inserting a new section 790LBA into the Companies Act 2006. See the Minister's undertaking at report stage (20 June, col. 149).
Member’s explanatory statement
This is consequential on my amendments to Schedule 2, page 225, lines 17 and 41. See the Minister's undertaking at report stage (20 June, col. 149).
Member’s explanatory statement
This is consequential on my amendment to Schedule 2, page 225, line 2 inserting a new section 790LBA into the Companies Act 2006. See the Minister's undertaking at report stage (20 June, col. 149).
Member’s explanatory statement
This is consequential on my amendments to Schedule 2, page 225, lines 17 and 41. See the Minister's undertaking at report stage (20 June, col. 149).
“17A_(1) Schedule 1B (enforcement of disclosure requirements in relation to persons with significant control) is amended as follows.(2) In each of the following provisions, for “or 790E” substitute “, 790DA, 790E or 790EA”—(a) paragraph 1(1)(a) and (3)(a);(b) paragraph 8(3)(a);(c) paragraph 11(a) and (b);(d) paragraph 12(2)(b).(3) For paragraphs 13 and 14 substitute—“Offence of failing to comply with notices13_(1) A person to whom a notice under section 790D, 790DA, 790E or 790EA is addressed commits an offence if the person fails, without reasonable excuse, to comply with the notice.(2) Where the person is a legal entity, the offence is also committed by every officer of the entity who is in default.(3) A person guilty of an offence under this paragraph is liable—(a) on conviction on indictment, to imprisonment for a term not exceeding two years or a fine (or both);(b) on summary conviction—(i) in England and Wales, to imprisonment for a term not exceeding the general limit in a magistrates’ court or a fine (or both);(ii) in Scotland, to imprisonment for a term not exceeding 12 months or a fine not exceeding the statutory maximum (or both);(iii) in Northern Ireland, to imprisonment for a term not exceeding 6 months or a fine not exceeding the statutory maximum (or both).Offence of failing to provide information14_(1) A person commits an offence if the person fails, without reasonable excuse, to comply with a duty under section 790G, 790H or 790HA.(2) Where the person is a legal entity, the offence is also committed by every officer of the entity who is in default.(3) A person guilty of an offence under this paragraph is liable—(a) on conviction on indictment, to imprisonment for a term not exceeding two years or a fine (or both);(b) on summary conviction— (i) in England and Wales, to imprisonment for a term not exceeding the general limit in a magistrates’ court or a fine (or both);(ii) in Scotland, to imprisonment for a term not exceeding 12 months or a fine not exceeding the statutory maximum (or both);(iii) in Northern Ireland, to imprisonment for a term not exceeding 6 months or a fine not exceeding the statutory maximum (or both).False statements: basic offence14A_(1) A person commits an offence if, in purported compliance with a notice under section 790D, 790DA, 790E or 790EA or in purported compliance with a duty imposed by section 790G, 790H or 790HA , and without reasonable excuse, the person makes a statement that is misleading, false or deceptive in a material particular.(2) Where the person is a legal entity, the offence is also committed by every officer of the entity who is in default.(3) A person guilty of an offence under this paragraph is liable on summary conviction—(a) in England and Wales, to a fine;(b) in Scotland, to a fine not exceeding level 5 on the standard scale;(c) in Northern Ireland, to a fine not exceeding level 5 on the standard scale.False statements: aggravated offence14B_(1) A person commits an offence if, in purported compliance with a notice under section 790D, 790DA, 790E or 790EA or in purported compliance with a duty imposed by section 790G, 790H or 790HA, the person makes a statement that the person knows is misleading, false or deceptive in a material particular.(2) Where the person is a legal entity, the offence is also committed by every officer of the entity who is in default.(3) A person guilty of an offence under this paragraph is liable—(a) on conviction on indictment, to imprisonment for a term not exceeding two years or a fine (or both);(b) on summary conviction—(i) in England and Wales, to imprisonment for a term not exceeding the general limit in a magistrates’ court or to a fine (or both);(ii) in Scotland, to imprisonment for a term not exceeding twelve months or to a fine not exceeding the statutory maximum (or both);(iii) in Northern Ireland, to imprisonment for a term not exceeding six months or to a fine not exceeding the statutory maximum (or both).””Member’s explanatory statement
This introduces a reasonable excuse defence for offences relating to a failure to comply with duties relating to persons with significant control. It also replaces the offences relating to false or misleading information with a strict liability offence (not dependent on knowledge) and an aggravated offence (where there is knowledge). See the Minister's undertaking at report stage (20 June, col. 149).
Member’s explanatory statement
This is consequential on my amendments to Schedule 2, page 225, lines 2, 17 and 41. See the Minister's undertaking at report stage (20 June, col. 149).