Proposed Companies House Reform

The Government is currently considering and discussing plans for a reform to Companies House in order to ensure there is an increase in transparency for those viewing the register and in order to reduce fraud and money laundering.  The main changes they are looking to implement are set out below: –

1. Verification

The Government will ensure company directors, PSC’s and anyone who presents information to the register verifies their identification.

One big change they are looking to implement is that directors will not be legally appointed until their identification has been verified by Companies House.  Once Companies House has been able to successfully verify their identification, such director will be able to start their appointment.

The verification of PSC’s will be slightly different in that they will become a PSC instantly.  A flag will remain against their name on the register until Companies House has been able to verify. If a PSC fails to be verified, this will constitute an offence with the risk of sanctions being imposed.

Agents (e.g., accountants or lawyers) will be able to set up an account to verify information in order to prevent needing to verify themselves personally if various people within their organisation are using the service.  Agents will need to be covered by UK anti-money laundering regulations in order to have a verification account.

During the transition period of these rules being implemented, all current directors and PSC’s will be allowed to continue with their roles but will need to verify themselves as soon as possible.  Once the period of transition has expired, unverified individuals face compliance action.

2. Information checking/amending

If any information appears to be incorrect or fraudulent, the Registrar will have the ability to query and check this information before it is placed on the register.  Third parties will also have the ability to raise queries over any information that seems incorrect.  This should help the public put more trust in the information that is held on the register.

At present the Registrar’s powers to amend the register is limited.  These powers will be extended in order to simplify the process and look to reduce the amount of court applications that have to be made for simple amendments. Companies House will have the ability to remove such information from the register if it is believed to not be true and it will be for the company that filed such information to provide evidence proving otherwise.

3. Register of directors

Companies will no longer be required to keep a register of directors with their statutory books.  The register as shown on the public register will become the only register required.

4. Personal information

There will no longer be a need for directors to include their occupation on the register.  For any individuals whose occupation is currently shown on Companies House, they will be able to request that this information is removed.  They will also be able to request their signature, date of birth and residential address (if shown) are removed.

Whilst information will be removed from the public register, Companies House will still hold such information and will be able to release this to Governmental bodies if required for legal reasons.

These changes are not expected to be implemented for another 18 – 24 months however, this reform is a step in the right direction in terms of moving forward and updating the Companies House register as it currently stands.

If you have any questions, please get in touch with the Corporate & Commercial team on 01256 320555.

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