Draft amendments to the Companies Act 2006 will see stringent identity verification procedures introduced for those setting up, running or controlling companies. It aims to stamp out money laundering through fake identities.
A draft Statutory Instrument (SI) presented to Parliament in May makes provisions under the Companies Act 2006 regarding identity verification, authorised corporate service providers and unique identifiers. These amendments to the 2006 Act are a result of the Economic Crime and Corporate Transparency Act 2023.
From the new SI, the status of 'identity is verified' can be obtained through verification by the Registrar of Companies or an Authorised Corporate Service Provider (ACSP). A unique identifier will be allocated to each individual verified under this SI. Individuals cannot act as a company director without first having their identity verified.
These changes are to improve the reliability of the information held by Companies House. In turn, this should make it harder for individuals to create a fictitious identity or to fraudulently use another person's identity to set up or run a company.
The new legislation will also require all directors, Persons with Significant Control (PSCs) and those who file documents with the Registrar (excluding employees of ACSPs), to verify their identity. All agents must be registered as an ACSP with the Registrar and be UK-supervised for Anti-Money Laundering purposes. Previously there was no restriction on the ability of third parties to file documents or form companies on behalf of others and there was evidence that this enabled money laundering schemes.
The identity verification procedure in the SI requires specific information to be included on the application and allows the Registrar to demand further information and evidence as necessary. These additional powers aim to future-proof the procedures.
Useful guides on this topic
Register of Persons with Significant Control (subscriber version)
What is the Register of Persons with Significant Control (PSC)? Who must complete it? Who is a Person with Significant Control? What details must be included on the Register?
Companies House: What's New 2024
From 3 March 2024, Companies House expects to enact its new powers under the Economic Crime and Corporate Transparency Act to query information provided to its Register. Accountants should review their client's registered details to ensure that they comply accordingly.
Anti-Money Laundering: do you need to register?
Which businesses are required to register with a supervisor for Anti-Money Laundering (AML) purposes? Who is your supervisor for (AML) purposes?
External link
