After an initial consultation in 2019 and follow-up consultations in 2020, the government has now published its final position on Companies House reform before introducing legislation to effect the changes. This snapshot summarizes the main proposals.
ENHANCED ROLE AND INCREASED POWERS FOR THE CLERK
The clerk will have the power to:
- search all documents (including company names) that appear erroneous, abnormal, or suspicious, and which may impact the integrity of the broader registry/business environment. Added power to reject filings where the Registrar has questioned the information provided. Information already on the register in scope;
- eliminate registry items more quickly and in broader circumstances than is currently the case;
- sanction entities for failure to respond to a request or provide further evidence. Type of sanctions still under study;
- require all information to be filed numerically.
“…from being a largely passive recipient of information to a much more active gatekeeper…”
“…the greatest changes in the role of the Registrar since its creation in 1844…”
- General ban on corporate directors unless the principled exception applies.
- Principal-Based Exception has two conditions:
- all the directors of the corporate officer are natural persons; and
- prior to their appointment as directors of the corporate officer, all these natural person directors had their identity verified.
- Only company directors registered in the UK will be permitted. UK companies cannot have overseas registered company directors.
IDENTITY VERIFICATION AND DATA SHARING
- New identity verification requirements for all new and existing company directors (and their equivalents for other entities), PSCs and those filing information with Companies House. The photo ID will be digitally compared to a photo of the individual and the ID document verified. Company formation agents registered with Companies House can carry out the checks.
- Administrators and PSCs who do not verify their identity are committing criminal offense and/or incur a civil penalty. Companies run by an unverified director also commit an offence.
- Registrar empowered to share data proactively – rather than on demand, as is currently the case – with other regulatory and law enforcement agencies and authorities.
OTHER ENVISAGED REFORMS
- Deviation report at Companies House by Regulated Professionals expanded to include full director and registered office information.
- Single list of shareholders to be furnished by private companies, and certain listed companies, to Companies House.
- Company Formation Agents to prove that they are adequately supervised by AML before they can register with Companies House, form new companies and make deposits. Foreign agents will effectively no longer be able to access Companies House.
- Financial information on the registry to be improved by requiring companies to file their accounts in iXBRL and tagged. No changes to account filing deadlines at this time.
- New processes for delete sensitive information (eg names, addresses, signatures) of the register will be put in place, for example for those who are able to prove that they are at risk of harm.
The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought regarding your particular situation.