While Companies House makes moves to increase transparency about beneficial ownership of companies, it is also considering deleting vast amounts of public records concerning dissolved companies.

At present, details of dissolved companies are retained by Companies House – and remain available to the public – for 20 years. In response to an increasing number of "right to be forgotten" requests made to Companies House following the decision in Google Spain, it has proposed reducing this period to six years. The Data Protection Act does not specify how long information should be kept for, just that information "shall not be kept for longer than is necessary".

It is not particularly difficult to set up a company in the UK and there are a number of criticisms of the level of checks which are done before someone becomes a director. Companies House contains a significant amount of information about companies, their activities and their directors including addresses, nationalities, shareholdings, positions at other companies, charges and company accounts. It is not hard to see why there are arguments in favour of deletion and in favour of keeping the status quo.

Those in favour of a reduction say that Companies House holding on to this information longer than six years is personally damaging and in breach of data protection laws. They may, for example, argue that being associated with a company which went bust a decade ago is impacting on their current business activities.

Those against a reduction are more wide-ranging and more vocal. Banks, lawyers, credit agencies and businesses routinely use this information to conduct due diligence. The police and law enforcement agencies frequently use this information in complex, long-running investigations which will often span several years of individual or corporate activity. Investigative journalists will also use this information.

One of their arguments is that people who want this information deleted more quickly may in fact have something to hide, and there are examples of individuals who have been exposed by historic information about dissolved UK companies which would not be available today if Companies House's proposal was already in force.

They also argue that companies can be set up quickly, used to facilitate a crime and then dissolved quickly. If this is part of a larger web of fraud, money laundering, corruption or other economic crimes, then deleting the information after six years could mean criminals getting away with it, as vital evidence would be lost.

It remains to be seen what Companies House will ultimately do and the debate about how the balance between personal rights and global transparency should be resolved will rumble on. While we at Schillings would argue that it's not a case of transparency OR privacy, what is clear is that individuals, whether directors, shareholders or both, need to remain alert to changes in the law and corporate reporting obligations and how this may impact their privacy.

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