Overhaul of Companies House – Director Verification
In September the Government published the Economic Crime and Corporate Transparency Bill. The purpose of the Bill is to introduce reforms to tackle economic crime and improve transparency over corporate entities. A key part of this is to overhaul the way in which Companies House works and to extend its powers.
One of the potential reforms is that all directors of companies, members of LLPs, Persons of Significant Control (“PSCs”) any anyone else filing with Companies House will be required to verify their identity. The aim of this reform is to make it harder to register, for example, fictitious directors or beneficial owners on the Companies House register.
This requirement will need to be satisfied by all new and existing directors, members and PSCs. The Bill suggests the checks will be completed by Companies House itself or an “authorised corporate service provider”. Subject to some exceptions it is likely that identity verification will be a one-off requirement and a person will not need to be re-verified on a regular basis.
As with the Register of Overseas Entities which was introduced earlier this year, a transition period will apply for existing companies, LLPs etc to comply with the new requirements. A failure to comply with the new requirements will be shown on the entities Companies House register and sanctions/penalties may be incurred.
As at the date of this article the Bill was at the second reading stage in the House of Commons, and therefore there is no set timeline for the reforms to come into effect. The Bill needs to pass through the parliamentary process, and also allow time for Companies House to prepare for the various reforms. However, it may be worth considering what steps you would need to take to verify the identity of a director of your company. For larger businesses this may require a reasonable logistical effort.