Introduction

When we provide address services we are required to conduct Anti Money Laundering (AML) checks on the directors, shareholders and persons with significant control (PSCs). For most UK registered companies this is relatively easy. Companies House is a transparent register and all of the company details can be seen online. We can see who is running the company and verifying identities is straight forward.

However, some people register UK companies with corporate structures. Other companies or corporate entities are appointed as directors, shareholders and PSCs for UK companies. This makes it more complicated to see who owns or controls the UK company.

Holding companies are an example of a simple corporate structure. One company owns another company and the beneficial owners can be identified within the structure. More complex corporate structures are occasionally created with overseas companies being used or many companies appointed in a chain of ownership. This type of structure makes identifying the owners more difficult.

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What is a Complex Corporate Structure?

In simple terms this refers to a company that does not have immediate transparency of ownership and/or control.

If a company has several layers of corporate officers, shareholders and PSCs it makes it difficult to see who the beneficial owners are. In addition, when overseas companies are appointed as shareholders (often from tax havens or offshore locations) this also makes it very difficult to see who controls the company. It raises the question “why is there a lack of transparency”?

For example
ABC SEYCHELLES LTD owns shares in ABC BELIZE COMPANY LTD
ABC BELIZE COMPANY LTD owns shares in ABC UK COMPANY LTD

Because there is no public register for either the Seychelles company or the Belize company it is impossible to accurately confirm who the beneficial owner is.

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What is a Simple Corporate Structure?

There are many legitimate reasons for simple corporate structures to be created. One of the most common is the formation of a holding company. These are often created to separate assets or to purchase property. In a holding company structure, one company owns another and real people own the holding company.

For example
Mrs Jones owns shares in ABC HOLDING LIMITED.
ABC HOLDING LIMITED owns the shares in a trading company called ABC SERVICES LTD

Using Companies House, it is easy to see that Mrs Jones is the beneficial owner of both companies.

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MLR Requirements for Corporate Structures

We are legally required to ‘know our client’ and to conduct AML background checks on all of the directors, shareholders, owners and persons with significant control (PSCs) for a company using our address services.

If we can easily identify the people behind a simple corporate structure we are happy to support the company and to provide services. For complex corporate structures with overseas companies or nominees being used as  directors, shareholders or PSCs we are not able to provide service.

We cannot support any business when we cannot accurately confirm the structure and ownership of the company we are providing services to.

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Transparency

Limited companies and LLPs benefit from a limit to the liability of the shareholders/partners. In return, the company details are added to a public register for everyone to access. This transparency makes the UK a safer place to do business. However, there are many business owners that try to hide behind corporate structures and nominee officers.

 

That raises one simple question. Why are the beneficial owners of a business hiding their details? We do not support any company that does not have a clear and transparent corporate structure. If you are using a nominee director, nominee shareholder, or the company has a complex corporate structure we will not provide services to you and orders will be cancelled.

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