The Companies House reforms are part of the broader measures introduced by the Government to improve company reporting. These changes are designed to enhance transparency, prevent financial crime, and improve the overall reliability of company information.
As business owners, staying informed about these reforms and understanding how they will impact your company’s operations and compliance obligations is crucial.
What are the key changes?
The reforms to Companies House introduce several important changes, including stricter identity verification, enhanced reporting requirements, and greater powers for Companies House. Below, we outline the most critical aspects of the reforms.
Identity verification for directors and PSCs
One of the most significant changes is the introduction of mandatory identity verification for all company directors and Persons with Significant Control (PSCs). This requirement aims to curb fraudulent activity and ensure that those listed as directors or PSCs are who they say they are.
Every director and PSC must provide evidence of their identity before being registered. This process involves submitting proof of identity, such as a passport or driving licence, which will be mandatory for all new appointments. Existing directors and PSCs will also need to go through this verification process within a specified timeframe.
The Government believes this measure will help prevent the use of false identities and improve the overall integrity of the corporate registry. For businesses, it means an additional administrative step, but one that is essential for maintaining the credibility of your company’s public profile.
Changes to company filing requirements
The reforms also change the way companies file their information with Companies House. For instance, the annual confirmation statement will now require more detailed information, particularly regarding shareholder information. This increased transparency is intended to provide a clearer picture of a company’s ownership and control.
Additionally, the reforms introduce more stringent deadlines for filing certain documents, with the aim of reducing the number of late filings. Companies will need to be more diligent in ensuring that their information is up-to-date and submitted on time. Failure to comply could result in penalties or even strike-off action, so keeping on top of these new deadlines is crucial.
Enhanced powers for Companies House
Companies House has been granted greater powers to scrutinise and challenge the information it receives as part of the reforms. This includes rejecting suspicious or incomplete filings and requesting additional information if needed.
Companies House will also have the power to investigate and remove inaccurate information from the public register. This could include instances where company details have been falsified or where there is evidence of fraud. These enhanced powers mean that businesses must be more vigilant in ensuring the accuracy of the information they submit.
What do these changes mean for your business?
The Companies House reforms are designed to make the UK’s corporate environment more transparent and secure. However, they also place new obligations on businesses that must be met to stay compliant. Here’s what you need to consider:
Prepare for identity verification
If you are a company director or PSC, you will need to ensure that your identity is verified as required by the new rules. This may involve gathering the necessary documents and submitting them to Companies House. It’s a relatively straightforward process that must be completed within the designated timeframe to avoid any potential issues with your company’s registration.
Review your filing processes
With the introduction of stricter filing requirements, reviewing your current processes is essential to ensure they meet the new standards. This may involve updating your internal procedures, setting new reminders for filing deadlines, and ensuring that all necessary information is included in your submissions. By being proactive, you can avoid the risk of late filings and potential penalties.
Monitor your company information
Given the enhanced powers of Companies House, it’s more important than ever to ensure that the information your company submits is accurate and up-to-date. Regularly reviewing your company details on the public register can help you spot any inaccuracies or discrepancies that must be addressed. This vigilance will help protect your company’s reputation and avoid any unwanted scrutiny from regulators.
How we can help
At Pearson May, we understand that keeping up with regulatory changes can be challenging, particularly when they involve new and complex requirements like those introduced by the Companies House reforms.
We offer comprehensive support to ensure your company complies with all relevant regulations. From assisting with identity verification and updating your filing processes to monitoring your company information, we provide the expertise and reassurance you need to focus on running your business.
If you have any questions or need help understanding how these reforms affect your business, don’t hesitate to contact us.