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Reforms to Companies House to clamp down on fraud and up business confidence

Companies House will be reformed to clamp down on fraud and money laundering, with directors unable to be appointed until their identity has been verified. 

Reforms to Companies House to clamp down on fraud and up business confidence
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  • Maja Garaca Djurdjevic
  • September 21, 2020
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The UK’s register of company information will be reformed to clamp down on fraud and money laundering, the government has announced. Under these plans, directors will not be able to be appointed until their identity has been verified by Companies House.

The changes aim to increase the reliability of the data showing who is behind each company so that businesses have greater assurance when they are entering transactions with other companies, such as when small businesses are consulting the register to research potential suppliers and partners. 

It is also expected to improve the ability of law enforcement agencies, such as the National Crime Agency, to trace their activity for suspected fraud or money laundering.

"We are committed to making the UK the best place in the world to start and grow a business. The reforms we are making to the Companies House register will provide businesses with greater confidence in their transactions," said Minister for Corporate Responsibility Lord Callanan.

"Mandatory identity verification will mean criminals have no place to hide – allowing us to clamp down on fraud and money laundering and ensure people cannot manipulate the UK market for their own financial gain, whilst ensuring for the majority that the processes for setting up and running a company remain quick and easy."

To facilitate the new identity verification requirement, Companies House will develop a fast, efficient, 24/7 digital verification process to minimise any strain on business, and prevent delays in incorporations and filings.

According to the government, these reforms will not impact on the typical speed at which a company or organisation is formed and other filings are completed, with most companies able to be incorporated easily within 24 hours, as is the case now.

Resent research has revealed that data on Companies House was accessed 9.4 billion times in the last year, and is worth up to £3 billion per year to users.

"We are pleased that these significant and far-reaching changes are being announced. We know how valuable our data is, not just to businesses but to law enforcement and these reforms will unlock that value even further," said Louise Smyth, chief executive of Companies House.

"Driving confidence in the UK economy is at the very heart of our plans to modernise Companies House, and we already have a substantial transformation programme in place to bring the government’s ambition to life."

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