Corporate Transparency and the evolving role of Companies House
Under the latest reforms proposed in the Corporate Transparency and Register Reform White Paper, the role of Companies House will take on greater significance, and there will be available to it greater powers. Companies House will become the protector for the integrity of its register and the information filed on it.
Role and Powers
Companies House will have the power to:
- Scrutinise, challenge, and even reject, filings that it considers are incorrect, inconsistent, peculiar, strange, fraudulent or suspicious, and which could affect integrity of the register. This will apply also to information already filed on the register, and in respect of which, Companies House will also have the ability to remove.
- Issue fines and penalties (the precise nature of which have not yet been determined) for failure to respond to queries raised, or to provide additional evidence required, by Companies House.
- Share information (in certain circumstances) that it flags as suspicious to law enforcement, anti-money laundering regulators and other regulatory bodies.
- Require all information to be filed on the register, be filed digitally (and, in the case of accounts, to be filed in iXBRL).
Identity Verification
- All entities registered at Companies House will be required to have at least one fully verified natural person linked to it, to create a “verified account”.
This will apply to any new, or existing, director (or member of a limited liability partnership (LLP), or general partner of a limited partnership), persons with significant control (PSCs), and anyone else who will file information for that entity at Companies House.
- Directors, or equivalents, and PSCs who fail to verify their identification will commit a criminal and civil offence. As will any company that has an unverified director. Companies House may refuse to register an unverified director, but, for the moment at least, it will not refuse to register an unverified PSC. Instead the offence would attract the relevant sanctions.
Ban on Corporate Directors
- Corporate directors will no longer be permitted, except where the corporate director is a UK registered corporate. All the directors of the corporate director are natural persons and, prior to their appointment as directors of the corporate director, their identities have been verified.
- An LLP is required to have at least one natural person as a designated member.
What next?
The proposed reforms represent some of the latest measures taken by the Government in its continuing drive for corporate transparency, and fight against economic crime. And it doesn’t stop there. The current duties on regulated professionals, such as solicitors and accountants, to report to Companies House discrepancies they discover in connection with information filed at Companies House, will be expanded to include all director and registered office information.
How we can help
TSP is a Legal 500 Leading Firm with its Corporate and Commercial Team being recommended. Team leader Mary Anne Fedeyko is highlighted as a Leading Individual. If we can assist with questions you may have about your business, please contact the team on info@tsplegal.com or call 01206 574431.