Jessica O'ConnorMandatory identity verification for company directors and people with significant control (PSCs) has come into force today, in a move designed to improve corporate transparency and reduce the risks posed to employees, customers and legitimate businesses.
The changes, introduced by Companies House and phased in over the next 12 months, are intended to ensure directors are who they claim to be and to curb the use of fake or stolen identities in company registrations.
From 18th November, anyone becoming a director or PSC must verify their identity through Companies House, either via GOV.UK One Login or an Authorised Corporate Service Provider.
More than 1.5 million individuals have already used the voluntary service since April.
Once verified, directors receive a personal code confirming their identity, which must be submitted for each company role they hold.
The reforms are expected to improve safety and stability for employees by helping expose fraudulent or disqualified directors, strengthening governance and making it harder for criminals to establish companies that could put staff and stakeholders at risk.
Verification will also help Companies House take enforcement action when wrongdoing occurs.
Non-compliance is an offence and may result in financial penalties, referrals to the Insolvency Service or prosecution.
Companies House chief executive Andy King said: “We’re determined to help create an environment where honest businesses can thrive.
“We want them to know that when they’re doing business with another company, the information we hold about them is accurate and trustworthy. We also we want to prevent people starting and running companies for criminal purposes.”
Small Business Minister Blair McDougall said: “Mandatory identity verification marks a turning point in protecting honest businesses and hard-working consumers from fraud.
“When companies can trust the information on the Companies House register, they can make better decisions about who they work with. This will boost confidence, attract investment, and support our mission to grow Britain’s economy.”
Security Minister Dan Jarvis added: “Criminals are using fake companies as fronts for serious organised crime and they must be stopped.
“These new measures will ensure fraudulent directors are rooted out and banned, as we continue to pursue those who use dirty money for criminal gain.”
