With Australia having just closed its consultation on allowing company directors to have a director identity number (DIN), it is useful to see the broader perspective being taken in New Zealand to that issue, and in other countries.
Beneficial ownership of companies
New Zealand is in the midst of a consultation on opening up access to the beneficial ownership of its companies and limited partnerships – see Increasing the Transparency of the Beneficial Ownership of New Zealand Companies and Limited Partnerships, June 2018. A ‘beneficial owner’ is defined as ‘a natural person who ultimately owns or exercises effective control over a corporate entity’. As well as a DIN for directors, NZ is asking whether beneficial owners should also be allocated a DIN.
The NZ paper usefully summarises approaches taken or being taken around the world, with the EU proposing that its member states ensure that their companies hold adequate, accurate and current information about their beneficial owners, and a central register that is available to law enforcement and tax authorities and AML reporting entities, and with public access given to this beneficial ownership information. Hong Kong already has its Significant Controllers Register, similar to that of Singapore, that is, a company-held register accessible to law enforcement agencies. England has its Register of Persons with Significant Control under Part 21A Companies Act 2006.
As much as NZ says about Australia it is that
‘in early 2017, Australia publicly consulted on introducing a register and the government is considering what action is needed’: referring to Treasury’s Increasing transparency of the beneficial ownership of companies, March 2017.
Free public access to company registers
A significant difference is that England and NZ provide free public access to their company registers, unlike Australia, which imposes a ‘red tape’ hurdle to access this important data.
Much of the focus on beneficial ownership emerged in 2016 at an international anticorruption summit held in London. Of all potential measures to combat corruption, transparency of beneficial ownership information generated the largest number of commitments from summit participants. At the London summit, various states including Australia and New Zealand committed to explore the establishment of a public central register of company beneficial ownership information.
DIN and directors’ homes addresses
Related to this is the NZ government’s consideration of a director identity number (DIN). Its recent inquiry, on which submissions have also recently closed, is whether residential addresses of directors should be on the companies register, if a DIN is introduced: see Publication of Directors’ Residential Addresses on the Companies Register, June 2018.
Australia and its approach
While the Australian government is furiously introducing laws to ‘combat’ phoenix and other unlawful corporate and tax activity, the government itself is part of the problem, in abetting such misconduct by not opening corporate records to public scrutiny and transparency.
Except of course to ‘journalists’.