The implications for company directors who don’t comply with identity checks will have financial and reputational impacts for their businesses.
Directors have been made to face up to identity checks to register a company in Companies House, and avoid fines or finding more expensive identity solutions than necessary.
The requirements of The Economic Crime and Corporate Transparency Act 2023 transpire that mandatory verification will be expected of company directors, or people with significant control, who file registrations in Companies House, keeping oversight of trust and transparency in active UK businesses.
Companies House wants to maintain its register of accurate information pertaining to businesses and owners, which anyone can freely search for in the national database. The IDV process will be diligently finalised in the coming months, whilst early preparation is vital to enhance “the integrity and accuracy of the public record at Companies House” said Watson Farley & Williams Legal firm.
From Autumn, the requirements will apply to existing directors of UK companies, all members of Limited Liability Partnerships, persons with “significant control”, a relevant officer of a legal entity or LLP, general partners or any individuals filing information at Companies House. If inaccurate company information is registered, it could indicate fraudulent activities which are exposed in a trusted public database.
MoneyWeek reported that 200,000 out of 7 million people had verified their ID in its register, but that many people are yet to log back in and check their accounts.
The crackdown on ID checks will see vast amounts of false or incorrect data culled, related to approximately 100,400 companies. The systems will be scanned for evidence of fraud if companies are registered at suspicious addresses, which could indicate a common practice known as money laundering or any other fraudulent activity.
Company directors can identify themselves simply by downloading the free GOV.UK One Login service app, as well as possessing Companies House and government gateway logins. Whilst most company directors generally support the principle of ID checks, the warnings to those that may delay verification are hitting, especially for the individual’s or business’ reputation, the risk of disqualification and blocked registrations.
A spokesperson said the government would support “businesses and help people verify their identities”, who will be contacted with advice and guidance on how compatible the One Login app is with accessing Companies House.
The new IDV requirements will also apply to directors of overseas companies that are registered at Companies House.
From introducing voluntary verification in April 2025, a 12 month transition period will start in Autumn 2025 when relevant individuals must verify their identities before their next confirmation statement is filed. By 2026, ID compliance will be mandatory for filing documents and checks will be enforced as the grace period ends.
GOV.UK login, via the web or app, confirms that systems and processes have been set up to prevent unauthorised access or disclosure of information with advanced levels of encryption.
