Firm News | 24.05.23
You can’t hide from Companies House
This is the message the Government wants to send with its Economic Crime and Corporate Transparency Bill, which is undergoing its final stages of review in the House of Lords and is expected to become law later this year.
Central to the Government’s plans is a reform of Companies House, which includes the introduction of identity verification for company directors, People with Significant Control (PSCs) and those filing documents at Companies House.
How will identify verification work?
There will be two options for those seeking to verify their identity: (a) a direct service with Companies House via an online portal; and (b) services provided by intermediaries known as Authorised Corporate Service Providers. It is anticipated that these intermediaries will include law firms, accountants and company formation agents.
When will I need to verify?
There will be a transition period for all existing directors and PSCs to enable them to comply.
When incorporating a new company, all directors must be verified before the application is delivered to Companies House. Post-incorporation, any new director must be verified before their appointment is notified to Companies House. In this regard, it is important to remember that a company must notify Companies House of a director’s appointment within 14 days of the date of appointment.
The identity of new individual PSCs will need to be verified within 14 days of them being registered with Companies House. For corporate bodies who are “registrable legal entities” for the purposes of a company’s PSC register, the period will be 28 days and the verification will need to be of a relevant human officer of the corporate body.
Can I ignore these requirements?
Failure to comply with these requirements by the end of the transition period may result in criminal sanctions or civil penalties. Companies House may also annotate the register to show an ‘unverified’ status.
These penalties do not just apply to the individual who acts as a director but has not been verified within the required 14-day period. The company’s other officers will also commit a criminal offence by allowing them to act and be exposed to civil penalties.
If a PSC has not been verified, Companies House will still register them, but their unverified status will be noted on the register, and they will be chased for verification. If verification is not completed within the relevant 14 or 28-day time limit, the PSC will commit an offence and may incur civil penalties.
Additionally, failure to comply with the verification requirements may lead to Companies House rejecting an incorporation application or restricting an existing company’s ability to make its statutory filings.
The Corporate and Commercial Team at Wansbroughs will continue to watch the progress of this bill and keep our clients updated.