Companies House, the UK’s register of company information, is to be reformed under new plans designed to prevent fraud and money laundering.
As part of the reforms, directors will have to have their identity verified by Companies House before they can be appointed.
Matthew Johnson, an Associate Solicitor with Palmers, who specialises in company law, explained: “The amendment aims to increase the accuracy of data held by that Companies House, so that businesses have greater assurance when they are entering into transactions with other companies.”
The move will also assist law enforcement agencies, such as the National Crime Agency, to trace the activity of suspected fraud or money laundering.
Companies House is understood to be developing a 24/7 digital verification process to reduce the administrative burden on businesses and prevent delays to incorporation and filings.
The Government has said that these reforms won’t impact the typical speed at which a company or organisation is formed and other filings are completed – with most companies able to be incorporated easily within 24 hours.
The changes are a result of the Government’s 2019 consultation on Corporate Transparency and Register Reform. As part of this, Companies House will be given additional powers to query and reject information, improve the quality of data on the register and provide greater protections to users’ personal data, to help protect them from fraud and other harms.
Matthew added: “It is not yet clear when this new system will be in place so we will provide further updates as and when new guidance is issued.
“In the meantime, it is important for directors and company executives to seek legal advice to ensure compliance, particular given that the penalties imposed upon individual company officers are becoming both more widespread and severe.”
For help and advice on company secretarial matters and all aspects of company law, please contact us.
Palmers Solicitors, founded in 1983, is one of the leading law firms in Essex with a total staffing complement of around 100 people to assist our wide range of private and commercial clients, covering the whole spectrum of legal advice.