New proposals to promote business confidence
The government is planning significant changes to the registry of company information. The aim is to increase company transparency and clamp down on fraud and money laundering, which costs the UK economy more than £100 billion a year, according to the National Crime Agency.
Compulsory identity verification will be introduced for all directors, people with significant control (PSCs) of companies and agents who file on behalf of companies. General partners in limited partnerships and designated members in limited liability partnerships will also have to comply. A new director’s appointment will only have legal effect once their identity has been confirmed.
Verification will be compulsory for all PSCs and any non-verification status will appear on the public register. Failure to verify will be an offence. The requirements will apply to all live registered companies, with a transitional period after which unverified individuals will face compliance action and possible prosecution. However, shareholders will not need to have their identity verified unless they are PSCs.
Companies House will be given powers to check and query submitted information before it is placed on the register, and it will have wider powers to investigate and remove false information. Changes to the filing of company accounts are expected to include digital iXBRL tagging that would allow software to analyse, collate and cross-reference data across different sets of accounts.
Some of the reforms are intended to help protect individuals from fraud and other harm. The register will no longer have to show director’s occupation, signature, day of date of birth and residential address, if it is the company’s registered office. Other changes will focus on ensuring compliance, sharing intelligence and deterring abuse of corporate entities.
The government will publish details of how the reforms – aimed at promoting business confidence – will be implemented but legislation will only be introduced when Parliamentary time allows.