Jack Bennett Tax Consultant

The Economic Crime and Corporate Transparency Bill seeks to provide Companies House with enhanced powers to improve the quality of the financial information on the register. At the time of writing the Bill is currently working through Parliament and has not yet obtained Royal Assent.

Companies House currently have minimal powers to correct documents that contain inconsistencies or appear incomplete. The Bill seeks to rectify this by allowing Companies House greater control over the information on their website, including the ability to reject documents for inconsistencies and to request further information concerning the delivery of documents.

The government aims to increase corporate transparency and reduce the use of UK companies for criminal purposes. One of the reasons for the reforms is to tackle abuse of UK-registered companies by international money laundering networks and to protect individuals from fraud. By adding extra layers of verification and investigation, the ability to abuse UK companies will be reduced. 

Key provisions currently included in the draft legislation are: 
  • The Introduction of identity verification for all and existing registered company directors, People with Significant Control (PSCs), and those delivering documents to the Registrar. 

The identity verification process is the most significant change which is being implemented to help deter those wishing to start companies for illegal purposes, it will make it much harder to register fictitious directors or beneficial owners. All new and existing company directors, persons with significant control (PSCs), members of LLPs and anyone else submitting filings will need a verified account at Companies House.

There will be two ways in which you will be able to verify yourself/your company – direct verification via Companies House and an indirect route through an Authorised Corporate Service Provider (ACSP). Identity verification is expected to be a one-time requirement, although there may be some instances where this verification has to be repeated, such as upon a change of name. 

  • Increased restrictions on Corporate entities being appointed as Directors of companies.
  • The Registrar will have new powers to increase the integrity of the information held by the register - new powers to check, remove or decline information submitted to, or already on the companies register. 
  • The expansion of powers to remove material from the Register includes a new discretionary power to remove material which impacts upon the integrity of the Register. 
  • Improvement of financial information on the register.
  • Providing companies House with more effective investigative and enforcement powers and introducing better cross-checking of data with other public and private sector bodies.
The reforms enable the Registrar to clean up the register and allow faith to be restored in the information available at Companies House. Whilst this involves additional verification and costs, it is expected to significantly impact the reliability of the data on Companies House and help to combat Money Laundering in the UK.

Please note: This article is provided for information only and was correct as at time of writing (05/01/23). Any lists and details provided above are not exhaustive and are not intended to be full and complete guidance.  No action should be taken without consulting detailed legislation or seeking independent professional advice. Therefore no responsibility for loss occasioned by any person acting or refraining from action as a result of the material contained in this article can be accepted.