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Companies House Reform and ID Checks on Directors

07 October 2020

On 18 September 2020, the department for Business, Energy and Industrial Strategy (BEIS) published the government’s response to its consultation on proposed reforms to Companies House. In its response, the government announced a number of proposals, including compulsory identity verification of directors, which are aimed at “clamp[ing] down on fraud and money laundering’.

Under the proposals, Companies House will be given enhanced powers to query, investigate and remove false information submitted to it, and directors will not be appointed until their identity has been verified by Companies House. Whilst the exact detail of how this proposed verification process will be operated is not yet known, the government has stated that the majority of such verifications would be conducted through a digital process which, for most, will be complete in a ‘matter of minutes’.

The other proposals announced include:

   Emma Barclay 

Emma Barclay 
Senior Associate

    Victoria MacAulay

 Victoria MacAulay
Solicitor

  • applying the compulsory identity verification beyond the appointment of directors to people with significant control (PSCs) and all individuals who file information on behalf of a company. It may also extend to those in a similar position as directors in different corporate structures (for example, general partners in limited partnership and designated members in limited liability partnerships);
  • only permitting supervised agents to file information on behalf of a company and requiring them to provide evidence of the verification they have undertaken. Agents will need to be covered by appropriate UK anti-money laundering regulations and have a verified account at Companies House;
  • tightening regulation on amendments to accounting reference periods and reviewing some broader aspects of accounts filing, particularly the exemptions that allow companies to submit micro or dormant accounts;
  • removing restrictions to enable certain personal information to be removed from the register; and
  • reforming the process under which certificates of good standing are issued by Companies House.

The full detail of the proposals can be found in the Government’s response to Corporate Transparency and Register Reform.

When effected, these new proposals will increase transparency at Companies House whilst also seeking to further protect personal information (through the removal of certain personal information from the register). There are, however, a number of practical and regulatory points which will need to be considered before these proposals can come to fruition.

The government has advised that it will bring forward legislation to enact the reforms to the register when Parliamentary time allows.

Emma Barclay, Senior Associate, eba@bto.co.uk / 0141 221 8012

Victoria MacAulay, Solictior, vma@bto.co.uk / 0141 221 8012 

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