As part of its wider strategy to make business more transparent in the UK and following the recent introduction of the Economic Crime (Transparency and Enforcement) Act 2022, HM government has published its latest White Paper. This one deals with reforms to Companies House following three years of consultations. 

In brief, Companies House will now be armed with greater powers to deal with the information stored on its register. Notably there will now be identity-verification requirements for all new and existing company directors. There will also be a ban on corporate directors. 

This will fundamentally change Companies House’s role from a mainly passive recipient of information to an active gatekeeper. This is important for the creation of companies and means the register will ultimately become a custodian of more reliable data.

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Updated powers

The power to query information – Companies House will be given the power to query any filings that appear erroneous, anomalous or suspicious, and which may impact the integrity of the register or the wider business environment. It will have power to request further evidence and/or reject the filing. 

Power to remove information from the register – the register will have the power to remove material more swiftly and in wider circumstances than it currently can.

Digital filing of information – be able to require all information to be filed digitally. Company accounts will have to be tagged and filed in iXBRL.

 Power to share and cross-reference data – new powers to be able to pass information on to law enforcement or other public and regulatory bodies, as well as private registers to cross-reference. 

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New procedures and requirements

Identity verification

New identity verification requirements will be put in place for existing and new company directors, people with significant control (PSCs) and those filing information with Companies House. It is intended that all entities registered at Companies House will have at least one fully verified natural person directly associated with them on the public register. 

Companies will now be required to record the full names of all the shareholders in their registers. All private companies, and those traded companies where shareholders hold at least 5% of the issued shares of any class of the company, will be required to provide a one-off full shareholder list. 

Finally, all third-party agents must also be registered and supervised in the UK, so that they are subject to the UK anti-money laundering regime. 

Directors and PSCs who do not verify their ID will commit a criminal offence and/or incur a civil penalty. Companies that have an unverified director will also commit an offence. There will be a transition period to comply. 

Ban on corporate directors

The ban on corporate directors (from the Small Business, Enterprise and Employment Act 2015) will also be implemented as part of the reforms. The only exception is where:

• all the directors of the corporate director are natural persons; and
• prior to their appointment as directors of the corporate director, all the directors have had their identities verified.

It is also important to note that only UK registered corporate directors will be permitted; companies will not be able to have overseas-registered corporate directors.