Recently it was released on my radar that it’s possible a reform may be coming in the form of Government proposals strictly relating to Companies House. In this week’s update, I will be looking at the White Paper on the reform of Companies House and highlighting what exactly this means.
From the looks of the proposals:
- Identity verification requirements will be introduced for all new and existing company directors – photo ID will be digitally compared to a photo of the individual, and the ID document verified. Please note that directors and PSCs who do not verify their ID will commit a criminal offence and/or incur a civil penalty. Companies that have an unverified director will also commit an offence;
- Companies House will be given greater powers in relation to information on the register; and
- A ban on corporate directors (previously set out in the Small Business, Enterprise and Employment Act 2015) will be implemented. There are exceptions to this though where all the directors of the corporate director are natural persons and have had their identities verified.
So why is this important? The answer is in the change of role. Traditionally Companies House was an information recorder, receiving and noting information, this change (if implemented), would make it much more active agency with proposed powers to:
- Remove material from the register more swiftly and in wider circumstances than currently;
- Require all information to be filed digitally;
- Query any filings (including company names) that appear erroneous, anomalous or suspicious; and
- Request further evidence and/or reject the filings.
Other proposed reforms are to:
- Company formation agents will need to prove they are adequately AML supervised before they can register with Companies House, form new companies and make filings.
- Overseas agents will effectively no longer be able to access Companies House.
- One-off shareholder lists to be provided by private companies, and certain traded companies, to Companies House.
- New processes to suppress sensitive information (for example names, addresses etc.) from the register will be put in place, e.g. for those able to prove they are at risk of harm.
For more information, a snapshot of the proposals can be found here.
Regards to all,