March 1st, 2024

New requirements on identity verification and visibility of ownership

On 4th March 2024, the Economic Crime and Corporate Transparency Act comes into effect, giving Companies House increased authority through various new measures. The legislation is a key step in the Government’s plan to tackle economic crime and improve corporate transparency, and contains a number of new requirements on businesses active in the UK. Here are some of the changes you need to be aware of when operating or setting up your business in the UK. 

Having received Royal Assent in October 2023, the Economic Crime and Corporate Transparency Bill is now being put into place, with the aim to tackle economic crime and increase transparency within businesses and organisations.

To achieve this, the Government is expanding the authority of Companies House, giving it increased investigation and enforcement powers to share data with law enforcement agencies and other government departments. This also entails a number of measures that will affect businesses operating in the UK.

Identity Verification

Companies House is implementing a new identity verification process to prevent illegal use of companies in the UK. This means that individuals involved in setting up, running, owning or controlling a company will need to verify their identity, using ID documents like passports. The requirement applies to directors, people with significant control, and members of Limited Liability Partnerships. However, anyone acting on behalf of a company must undergo identity verification.

Existing companies’ directors and PSCs will have a transition period to comply, which can be done directly with Companies House or through authorised agents. The full identity verification timeline and process will be explained by Companies House in the coming months, and Goodwille will work with you to ensure you remain compliant during the implementation.

Improving transparency of company ownership

The Economic Crime and Corporate Transparency Act will introduce measures to enhance transparency in company ownership. This means that companies will be required to maintain registers with full names of individual and corporate shareholders and members, and provide a onetime full shareholder list to Companies House for a more accessible display of shareholder information.

Companies claiming exemptions from PSC details will face increased scrutiny, with more information collected and displayed, including the reasons for exemptions. Relevant legal entities recorded as PSCs will have associated conditions displayed, and corporate directors will face restrictions, allowing only UK corporate entities with legal personality to be appointed. These must be natural personas and undergo identity verification.

In cases where it seems necessary, individuals will be able to apply to suppress some information from historical documents, including:

  • Residential address
  • Day of birth on documents registered before the 10th October 2015 (only the month and year have been displayed since)
  • Signatures
  • Business occupation

Those individuals who are at personal risk of physical harm or violence as a result of their information being on Companies House can apply to have their information protected from public view, such as:

  • Name and previous names
  • Sensitive addresses where public disclosure puts the resident at risk
  • In serious cases all other details including service address and partial date of birth

Please get in touch with our Head of Governance should you require any assistance about anything mentioned in this article.