The UK government has proposed the introduction of a new identity check procedure on the Companies House register as part of the Economic Crime & Corporate Transparency Bill (ECCT) 2022 which will come into effect following Royal Assent of the Bill.

This new procedure will apply to all existing companies and to those individuals who want to register companies or file with the Registrar. They will be required to prove their identity through specific verification methods.

The aim of the regulation is to give additional transparency to corporates and to make it more difficult for fraudulent directors or beneficial owners to reach Companies House.

We can assure you that if the proposed reforms regarding identity checks are implemented as law, our Company Secretarial department will be able to assist with the new requirements.

The identity verification is expected to be quick and straightforward. Individuals will be given the option to choose from two different methods: either via Companies House or indirectly through an Authorised Corporate Service Provider (ACSP).

If the individual decides to verify their identity directly through Companies House, they will be required to take a photograph or scan of their face and of the identifying documents, which will be then verified and reviewed within seconds.

Authorised Corporate Service Providers (ACSP) will be compelled to confirm that they have undertook the required verification checks when engaging with Companies House.

The identity verification checks conducted by an ACSP, such as Statura, will provide an equivalent level of assurance regarding the individual’s identity, just like the checks performed through the direct verification route.

Who will this apply to?

These checks will be applicable to all new and existing directors, People with Significant Control (PSC) and any other person filing with the Registrar.

For new directors, the identification will be required before the incorporation of the new entity is submitted to Companies House, instead, PSC will have a 14-day period after the incorporation to comply with the requirements. The term will be extended to 28 days for Relevant Legal Entities (RLE). Failure to do so it will be treated as criminal offence.

Existing directors and PSCs will be given a period of transition to comply with the new requirements, but anyone who wishes to file on the Registrar will be required to do verify their identity before doing so.

What will the consequence be if individuals don’t comply with the regulation?

At the moment, the consequences for those who will not comply with the regulation are said to be different depending on the circumstances.

In general, an individual that does not complete the verification will be subject to:

• Criminal proceedings
• Civil penalties issued by the Registrar of Companies
• Incorporations/registration of a new company being rejected
• Being unable to submit statutory filings
• The public register being annotated to show the individual’s status as ‘unverified’.

If you have any further questions or require additional assistance, please do not hesitate to reach out. You can contact Emily Jane Tyrrell at ejt@staturagroup.com, or you can get in touch with your main point of contact at Statura.