Companies House may soon change the information it requires from company directors, Persons of Significant Control (PSCs), relevant legal entities and individuals making filings to the Registrar. The proposed change is linked to the anticipated Royal Assent of the Economic Crime and Corporate Transparency Bill (the Bill) in spring 2023.
What are the proposed changes regarding verification of Companies House information?
The Bill seeks to ‘improve the accuracy of Companies House data’ and ‘support business decisions and law enforcement investigations’. Among its proposed changes, the Bill intends to:
- Promote the sharing of information between Companies House and other agencies, including law enforcement;
- Increase the powers available to Companies House to aid in the integrity and accuracy of the information it holds; and
- Introduce further identity verification requirements.
The requirement to verify the identity of individuals is likely to be the most immediate change impacting UK companies. Following assent, Companies House will introduce reforms requiring those applying for incorporation, and those already registered, to meet new verification requirements. All corporates should remain mindful of the potential change to ensure any new measures are met, especially in consideration of the impact of failing to comply.
How will the changes be satisfied?
Although not expressly clear at this stage, it is thought identity verification may be satisfied either directly or indirectly.
It is likely to be directly satisfied by providing Companies House with primary documentation verifying the identify of an individual, such as a passport.
Alternatively, it has been suggested that an ‘authorised corporate service provider’ may indirectly satisfy verification by providing confirmation of an individual’s identity. However, the Bill also seeks to amend part of the Companies Act 2006 making it an offence to make deceptive, misleading or false filings without a ‘reasonable excuse’. Therefore, it remains to be seen whether service providers will be comfortable providing such support.
Failure to comply
It is anticipated that companies already registered will be provided a transitional period in which to comply with any such reform. Corporates should therefore take note of deadlines when announced, as civil penalties and criminal liabilities are proposed for those failing to comply. Although not an exhaustive list, companies that fail to comply could be issued fines, and individuals themselves may be fined or even subject to disqualification.
When will the changes comes into force?
There is no definitive date as to when the above changes will take effect, as the Bill is yet to receive Royal Assent. The measures will also require new secondary legislation, guidance and system development.
We can help
Branch Austin McCormick has a dedicated team of company lawyers well placed to assist you with complying with the proposed new change and other Companies House requirements. For further information, please contact Harender Branch or Alette Anderson-Whitehouse on their respective email address below: