Companies House Clamps Down On Fraud To Give Directors Greater Confidence

companies house fraud Jan 03, 2021
Companies House Clamps Down On Fraud

On 18 September 2020, the Government announced the UK’s register of company information will be reformed to clamp down on fraud and money laundering.

Under the plans, directors will not be able to be appointed until their identity has been verified by Companies House.

The changes aim to increase the reliability of the data showing who is behind each company so that businesses have greater assurance when they are entering transactions with other companies, such as when small businesses are consulting the register to research potential suppliers and partners.

It will also improve the ability of law enforcement agencies, such as the National Crime Agency, to trace their activity for suspected fraud or money laundering. Identity verification will take place through a fast, efficient, digital process and is expected to take a matter of minutes.

These reforms will not impact on the typical speed at which a company or organisation is formed and other filings are completed. Most companies will be able to be incorporated easily within 24 hours as is the case now.

Data on Companies House informs many transactions between businesses and underpins credit scores and lending decisions. Register data was accessed 9.4 billion times in the last year, and research suggests it is worth up to £3 billion per year to users.

Where any new controls are introduced, Companies House have indicated they will keep the burden on business as low as possible and will continue to look for ways to make incorporation and access to its services as smooth as they can be.

To facilitate the new identity verification requirement, Companies House will develop a fast, efficient, 24/7 digital verification process to minimise any strain on business and prevent delays in incorporations and filings.

The government will consult on further changes to make Companies House more useful and usable, including reforms to the filing of company accounts.

The above resulted from the Government’s Corporate Transparency and Register Reform which contain the following:

• identity verification: introducing compulsory identity verification for all directors, People with Significant Control, and those filing information on behalf of a company

• reforms to Companies House powers: providing the Registrar of Companies stronger powers to query, seek evidence for, amend or remove information and to share it with law enforcement partners when certain conditions are met

• protecting personal information: improving the processes for removing personal information from the register

• company accounts: the response proposes further consultation on how to introduce full digital tagging of accounts to ensure consistency, easier identification, and comparability of information on the register.

We’ll be providing more information on the implementation of the Reform as it becomes available.

 

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