The butterfly effect: Theoretical implications of an apparently minor corporate transparency proposal

Abstract

The UK government has proposed a seemingly minor change to the UK corporate transparency regime, being to require Companies House to verify the identity of new directors of companies, persons of significant control and those incorporating companies, to help in the fight against corporate crime. These proposals seem sensible and innocuous. However, there are a number of theoretical implications which flow from this seemingly minor change. First, it starts the process of making the UK corporate register an effective gatekeeper. Second, it involves the state more in the establishment and operation of the company, strengthening the argument that the corporate form somehow exists as a gift from the state. Third, shareholders are ignored, which challenges argumentation structures for those who believe in shareholder primacy. This illustrates how dependent ostensibly universal company law theory is on a particular doctrinal structure, and thus how exposed particular calibrations of arguments are to being undermined. Every time the UK government proposes a minor change to company law doctrine, the butterfly flaps her wings and those advancing existing company law argumentation structures must brace themselves.