MPs Caution that UK shell Company Legislation will be easy to Evade

MPs warn that the new legislation enforced striving to uplift the secrecy surrounding the ownership of companies can be easily avoided by criminals.
A part of the Small Business Bill is currently being discussed in the House of Commons regarding the exposure of shareholders who own and run businesses, by revealing their names by using a public register. The policy has been enforced and supported by the UK Prime Minister, David Cameron, who assured the creation of a central register of beneficial ownership the previous summer. This measure aims to expose criminal anonymous shell companies by making it harder for them to cover earnings derived from corruption, tax avoidance and other unlawful activity.

Although the new legislation is greatly supported, some expert critics warn that the new measure can be easily evaded.
Briefly speaking, the new legislation may easily be avoided since it would not apply to foreign companies running in the UK via a branch. Outlaws who use front companies will possibly avoid the new legislation, or not comply with it properly, and proving this is difficult.

Although most organizations encourage and support the new law fully in theory, they express concern that a small portion of company owners who want to hide their ownership or control over a company can easily do so. This is due to the loophole exempting foreign companies operating in the UK from the legislation.
Others believe that the legislation should not apply to foreign companies operating in the UK since exclusion of non-UK companies rises the significance of global action. This is the major reason the UK is vigorously trying to persuade other jurisdiction to enforce this law in their countries.

Offshore hubs have been encouraged to follow UKs steps by creating a public register. Nonetheless, the majority believe the already existing measures which aim at controlling company service providers is more efficient when it comes to unveiling corporate felonies and crimes.
On the other hand, the UK insists that a public register is more effective, since by publicizing the names, more eyes will examine the list and thus it is more certain that criminals and crimes will be exposed.

Many have disapproved with the UK regarding its intention of charging companies that do not reveal the information concerning ownership with penalties. The new measure is viewed as complicated and entails risk that a plethora of companies will not comply simply because they will make unintentional mistakes or will not comprehend the requirements. Those who fail to comply with the new disclosure measure is punishable with up to two years imprisonment.

The UK government anticipates that the legislation will influence approximately 2.5 million companies and/or partnerships. Generally, the majority of beneficial owners are indeed the legal owners of the companies, and their names have already been recorded on a public register. A small portion of companies, around 400,000, is presumed to be the amount of companies where the beneficial owner is not the legal owner. Finally, the legislation will not influence companies that are on the stock market, since these have already been made to disclose information regarding the companies and owners.