Companies House will be reformed to clamp down on fraud and money laundering, with directors unable to be appointed until their identity has been verified.
The UK’s register of company information will be reformed to clamp down on fraud and money laundering, the government has announced today (Friday 18 September).
Under the plans, directors will not be able to be appointed until their identity has been verified by Companies House.
The changes aim to increase the reliability of the data showing who is behind each company so that businesses have greater assurance when they are entering transactions with other companies, such as when small businesses are consulting the register to research potential suppliers and partners.
It will also improve the ability of law enforcement agencies, such as the National Crime Agency, to trace their activity for suspected fraud or money laundering. Identity verification will take place through a fast, efficient, digital process and is expected to take a matter of minutes.
These reforms will not impact on the typical speed at which a company or organisation is formed and other filings are completed. Most companies will be able to be incorporated easily within 24 hours as is the case now.
Data on 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, and research suggests it is worth up to £3 billion per year to users.
The government’s full response to the Corporate Transparency and Register Reform consultation has been published today. The reforms will give Companies House more powers to query and reject information, to improve the quality of data on the register, as well as affording users greater protections over their personal data, to help protect them from fraud and other harms.
Minister for Corporate Responsibility Lord Callanan said:
Where any new controls are introduced, Companies House will keep the burden on business as low as possible and will continue to look for ways to make incorporation and access to its services as smooth as they can be.
For example, to facilitate the new identity verification requirement, Companies House will develop a fast, efficient, 24/7 digital verification process to minimise any strain on business, and prevent delays in incorporations and filings.
The government will consult on further changes to make Companies House more useful and usable, including reforms to the filing of company accounts.
Broader transformation of Companies House systems and processes will bring further business benefits through streamlining and digitising processes and improving the user experience.
The government will bring forward legislation to enact the reforms to the register when Parliamentary time allows.
Louise Smyth, chief executive of Companies House, said:
Security Minister James Brokenshire said:
The changes are a result of the government’s 2019 consultation on Corporate Transparency and Register Reform. The government response is available on the consultation page.