The Government proposes compulsory identity verification of directors by Companies House. The aim; to help trace fraudsters or money launderers. The Government says that Companies House will develop a, 24/7 digital verification process. More consultation is promised on on further changes to Companies House, including the filing of company accounts; part of a more wider digitising of the ‘user experience’ of those going through Government bodies. The government adds that it will bring forward legislation to enact the reforms to the register when Parliamentary time allows.
The aim to check the data showing who is behind each company so that companies have greater assurance when they are doing transactions with other businesses, such as when small businesses are consulting the register to research potential suppliers and partners. The Government says the changes will also improve the ability of law enforcement, such as the National Crime Agency (NCA), to trace suspected fraud or money laundering.
As the authorities say, Companies House informs many transactions between businesses and underpins credit scores and lending decisions. Register data was accessed 9.4 billion times in the last year.
The proposed reforms will give Companies House more powers to query and reject information, while affording users greater protections over their personal data, to help protect them from fraud and other harms it’s claimed.
At the Department for Business, Energy and Industrial Strategy, Minister for Corporate Responsibility Lord Callanan said: “We are committed to making the UK the best place in the world to start and grow a business. The reforms we are making to the Companies House register will provide businesses with greater confidence in their transactions. Mandatory identity verification will mean criminals have no place to hide – allowing us to clamp down on fraud and money laundering and ensure people cannot manipulate the UK market for their own financial gain, whilst ensuring for the majority that the processes for setting up and running a company remain quick and easy.”
And Louise Smyth, chief executive of Companies House, said: “We are pleased that these significant and far-reaching changes are being announced. We know how valuable our data is, not just to businesses but to law enforcement and these reforms will unlock that value even further. Driving confidence in the UK economy is at the very heart of our plans to modernise Companies House, and we already have a substantial transformation programme in place to bring the government’s ambition to life.”
This follows the government’s 2019 consultation on Corporate Transparency and Register Reform. The government response is available on the consultation page.
In April, Companies House introduced temporary easement measures in response to coronavirus, reviewed each month. Last month, Companies House decided the temporary measure to suspend compulsory strike off action will be lifted from October 10. Companies House will then resume the process to remove a company from the register if there’s reasonable cause to believe it’s no longer carrying on business or in operation.
