Finvestly, Manage Portfolio Assets and Business Matters quote Hamish Perry on new Companies House identity verification rules
From 18 November, all new directors and persons with significant control (PSCs) must verify their identity with Companies House before they can form or run a company. Existing directors and PSCs will be phased into the system over the next 12 months, completing verification when they next file a confirmation statement. Acting as a director without verification will become a criminal offence.
The reforms are aimed at tackling fraud, money laundering and the misuse of shell companies by ensuring that “the people setting up, running and controlling companies are who they say they are,” Companies House said. More than one million people have already verified their identities, with up to seven million more expected to complete the process over the next year.
Some commentators have suggested that the immediate impact will be visible in the number of new incorporations and the size of the UK company register more broadly.
Hamish Perry, Partner in our Corporate team, comments on the new obligations in Finvestly, Manage Portfolio Assets and Business Matters.
Hamish explains that an equally important detail of the new rules, which perhaps hasn't required as much attention as other elements, is that businesses must also now proactively investigate who their PSCs are. He explains:
From 18 November, companies must take additional steps to identify who their PSCs are, including serving formal notices on anyone they believe may hold that information,” he said. “There is also a duty to notify Companies House where a company suspects someone has become a PSC or relevant legal entity, even if the person hasn’t confirmed it.
Hamish warns that the changes represent a “significant raising of the bar” for corporate transparency.
Businesses with complex ownership structures or incomplete shareholder information will be particularly affected. They will need to implement clear internal processes to investigate and report their PSCs [...] This is not just a legal change. It’s a shift towards much greater regulatory accountability.
Read Hamish's comments in full here.
