Companies House sets out its plans on Transparency Reforms. Last month, Companies House published its Business Plan for the period April 2024 to March 2025. This includes its plans to implement reforms made by the Economic Crime and Corporate Transparency Act 2023. Companies (and their professional advisors) need to be aware of these, as the changes will have an impact on all companies. For example, new and existing directors, along with persons with significant control (which includes anyone holding more than 25% of a company’s voting shares) will need to have their ID verified at Companies House (or by an authorised corporate service provider, on behalf of Companies House). Furthermore, the proposed changes could lead to companies receiving enquiries from a more active Registrar in relation to incorrect or misleading filings (including historic ones) made at Companies House. With that in mind, below are some of the key points from the Business Plan: Information The Registrar plans to prioritise cleaning up existing information by identifying and removing information which is known to be inaccurate. The Registrar will also actively query and reject information if it is false, misleading or suspicious. If there is evidence that fraudulent information has been filed for a company, the Registrar will expedite the strike-off of the company concerned. As part of these procedures, all companies will need to confirm that they have been formed for a “lawful purpose” at incorporation and existing companies must confirm the continuation of such lawful purpose when they submit their annual confirmation statement. ID verification Significant changes will be made to Companies House systems, along with the integration of other Government services, for identity verification. The plans are for Companies House to have the capability to verify an individual’s identity by the end of March 2025. All individuals who register companies or make filings at Companies House must prove who they are by verifying their identity. This includes new and existing directors and persons with significant control (PSCs). For existing companies, there will be a transition period to give existing directors and PSCs time to comply with the new requirements, but this transitional process will begin in Spring 2025. Plans are for this to be a simple and speedy process (not one that adds significantly to the administrative burden on businesses). ID verification can be carried out in one of two ways: (i) direct verification via Companies House; or (ii) indirect verification via an Authorised Corporate Service Provider – see below. If using direct ID verification, this will link a person with a primary identity document, such as a passport or driving licence. Authorised Corporate Service Providers (ACSPs) New processes will be introduced for third party agents (such as incorporation agents, solicitors and accountants) to become authorised corporate service providers. In short, if an ACSP carries out identity verification checks this will achieve the same level of ID assurance as those undertaken through direct verification with Companies House. ACSPs will be required to declare that they have completed all necessary ID verification checks when they interact with Companies House. ACSPs themselves must confirm they are AML supervised and register with Companies House before they are allowed to form companies or to file on their behalf. They must also retain records so that the Registrar can request identity verification information if necessary. Corporate directors For those that are unaware, a company can, itself, be a director of another company. The Small Business Enterprise and Employment Act 2015 sought to bring this to an end almost a decade ago but this has not yet been brought into effect. Companies House will begin to develop processes that imposes limits on the use of corporate directors. Registered offices Companies will need to ensure that they provide a registered email address and an appropriate registered office address, and the use of PO boxes (or equivalent services) will be stopped by the end of March 2025. The Registrar will act against companies that do not have an appropriate office address. Personal information The Registrar will investigate the use of personal information without consent and begin to develop processes to enable the suppression of such information from the register. The intention is to enable changes that allow people who are personally at risk to apply for protection of their information. Intelligence assessment Companies House will develop a strategic intelligence assessment, alongside other Government departments, to identify and assess strategic threats posed by the misuse of corporate structures. It also intends to establish relationships with law enforcement and intelligence agencies to share data, enabling a multi-agency disruption approach to tackling economic crime. How can Morr & Co help? If you would like more information and advice on the changes planned at Companies House and it’s potential impact on your business, corporate compliance generally or any other corporate law matter please call 01737 854500 or email info@morrlaw.com and a member of our expert Corporate and Commercial team will get back to you. Please also note that Morr & Co provides a Company Secretarial Administrative service to assist with ongoing corporate compliance. Details of the service levels and fees can be provided on request. Disclaimer Although correct at the time of publication, the contents of this newsletter/blog are intended for general information purposes only and shall not be deemed to be, or constitute, legal advice. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article. Please contact us for the latest legal position. Authored by Greg Vincent Partner, Head of Department Message Tags Insights Corporate Insights On this page Related Stories Insights Corporate Compliance: Issues that Should Register with all Companies View more Contact our team today Contact Us
