Companies House are responsible for incorporating and dissolving limited companies in England and Wales, storing company information and making that information available to the public with an aim to make the information as complete and accurate as possible.
The government announced on 18 September 2020 its plans to clamp down on fraud and money laundering in its Corporate Transparency and Register Reform and on 29 September 2020 launched a strategy for 2020 – 2025 which identified the following goals:
- To inspire trust and confidence in the register
- To maximise the value of the register to the UK economy
- To combat economic crime through analysis and intelligence
- To give a great user experience
- To drive high performance in Companies House employees
- To deliver value through use of resources
You can read the full strategy here which sets out Companies House purpose, vision and future journey. Although we do not currently have a timetable for the reforms to be implemented some of the key changes that limited companies will face in light of the reforms are described below.
Directors ID verification
Before the names of Company directors can be listed on the Companies House register their identities will require verification. The Corporate Transparency and Register Reform states that Government intends for there to be 'a fast, efficient, 24/7 digital verification process, in order to prevent verification from causing significant delays in the incorporation and filing processes'.
Legal and technological barriers currently stand in the way of Companies House verifying identification. With Companies House collaborating with the Government and carrying out exploratory work to overcome the technological barriers and the Government intending to give the registrar powers of verification the strategy indicates there should be an active use of the services developed from business years 2023 – 2025.
Combatting Economic Crime
Companies House accepts that their verification processes may not be successful in every case meaning that their needs to be, as seen in the strategy goals, an active use of analysis and intelligence which includes:
- Being proactive in identifying suspicious activity
- Collaborating with others to share information to prevent and tackle crime
- Respond positively and promptly to information received
The government will also grant greater powers to Companies House to investigate and remove false information and share this information with law enforcement in a number of circumstances. Lexis PSL published an analysis on 13 October 2020 on the role of Companies House in the fight against economic crime which states that these 'reforms will undoubtedly assist in the fight against economic crime; the more transparent the register becomes, the more it will deter criminals. Law enforcement agencies, such as the National Crime Agency, will be able to trace activity for suspected fraud and money laundering more readily'.
The strategy sets out the aim of Companies House to become fully digital over the period of the strategy to save time and effort which will in turn have an environmental advantage. This will also include exploration of options such as Webchat and Chatbots to assist users in completing what they need to do.
This will begin in business year 2020 to 2021 when initial steps will be taken to eliminate paper output and transform and enhance digital services. In business years 2021 to 2023 further steps will be taken to eliminate paper output, transformation of existing services and development of services where there are currently no digital enablement's with final steps being taken in in the run up to the end of the 2025 business year to ensure paper output has been eliminated and services completely transformed.
All consultations into corporate transparency and the Companies House register have been concluded and we await further announcements on the progress of implementing the above reforms.
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*This article is provided for general information purposes only and does not constitute legal advice or other professional advice.