PROSPER MAGAZINE: DIGITAL EDITION
DIRECTOR ID CHECKS TO REFORM CONTROL OF COMPANIES HOUSE PROCEDURES
In this month’s Legal Round Robin, Richard Freeman, a Paralegal in the Business Services team at leading West Midlands law firm Higgs & Sons, outlines the implications of what has been dubbed one of the biggest changes to the company registration process in more than 200 years for businesses and directors across the region.
Any UK company or owner-managed business will be familiar with Companies House and the procedures that run alongside it.
More than 4.2 million UK companies, many from the Black Country and wider West Midlands area, are on the records of the UK’s official registrar of companies.
However, the framework which has been the bedrock of governance of all UK registered companies is set to undergo a major overhaul.
The recently announced government plans for the implementation of identity checks is a welcome measure to enhance the transparency of those companies registered at Companies House.
Designed to help reduce fraud – including international crime and money laundering – the new powers will bring in mandatory identity verification, with only those people fulfilling the requirements able to update the company’s file with Companies House.
This is a significant change from the current arrangement where documents can be filed at Companies House – for example, to give notice of the appointment or resignation of officers – by any individual, leading to a host of cases of identity theft for the company concerned and fraudulent findings.
The new rules will see digital identity verification required for all People with Significant Control (PSCs) and directors of UK registered companies, as well as those who file information on behalf of a company.
This will be a mandatory process and, in the case of identity checks for directors, must take place before a person can be legally appointed as a director.
Anyone not verified will be flagged by Companies House, with potential fines being introduced after a yet to be confirmed transition period.
The overall measures are a positive development. After all, this provides an additional layer of security to a crucial service for bona fide companies.
However, there is no escaping that the level of complexity around the previously straight-forward task of filing documents at Companies House will increase dramatically and the burden on each company to keep its own house in order will rise.
It is unclear how long the new verification process will take to complete, and this may present concerns over filings that are time-sensitive, potentially attracting fines for late delivery of confirmation statements or accounts.
To help ease that strain and as an agent eligible for verification under the new rules, our team at Higgs & Sons will be permitted to make filings on behalf of companies in England and Wales as a result of our own due diligence process.
This will prevent the need for individuals who are directors or PSCs to verify their identity again under the revised Companies House process.
For any company looking to discuss any of the above issues or other secretarial services, please contact Richard Freeman on 01384 327253 Richard.email@example.com
or David Ellis on 01384 327121 firstname.lastname@example.org