Companies House change: New identity verification requirements for companies

The Economic Crime and Corporate Transparency Act 2023 (ECCTA) has been introducing significant reforms to Companies House in stages, aiming to enhance transparency and combat economic crime.

One of the most significant developments is the introduction of identity verification requirements for company directors, persons with significant control (PSCs), and those filing on behalf of companies.

Why are identity verification rules being introduced?

The UK has long been seen as a relatively easy place to register and operate a company. While this simplicity supports entrepreneurship and business growth, Companies House has introduced this to prevent individuals looking to hide illicit activities behind opaque company structures exploiting this.

The new identity verification rules aim to:

• Improve the accuracy and integrity of data held at Companies House
• Prevent the misuse of companies for criminal purposes
• Increase trust in the UK’s corporate register
• Make it harder for anonymous individuals to control UK companies.

Who needs to be verified?

Once the new rules come into force in Autumn 2025, the following individuals must verify their identity:

• Company directors (including proposed directors on incorporation)
• PSCs – individuals who own or control more than 25% of shares or voting rights, or otherwise exercise significant influence over the company
• Members of LLPs – including designated members
• Anyone who files information on behalf of a company or LLP.

When will these changes take effect?

The identity verification rules are set to become mandatory in the Autumn this year, although it is now possible to start complying with them early. Identity verifications will be a compulsory part of incorporations and new appointments of directors and PSCs. A 12-month transition phase will also begin to require all existing directors and PSCs to verify their identities as part of the filing of the annual confirmation statement.

What happens if you don’t comply?

Compliance with identity verification will be a legal requirement. Failure to comply could result in:

• Companies House not accepting filings (including incorporation or changes to the register)
• Financial penalties for companies and individuals
• Directors being disqualified from holding office.

How will identity verification work?

There are three main routes for identity verification:

• Online at Companies House through the GOV.UK One Login service, using biometric passports, UK photo driving licences, or other approved photo IDs
• In person at selected Post Offices
• Verification through an Authorised Corporate Service Provider (ACSP).

Once the verification has been completed, a personal code will be issued by Companies House to the individual. From the Autumn, this code can be used to link the identity to Companies House records.

How we can help with identity verification

Kreston Reeves has recently registered as an ACSP, meaning we are authorised to carry out ID verification in accordance with the new regulations, supporting our clients through the whole process. We are currently finalising our verification system and will include a further update on our website and in our next business newsletter. In the meantime, if you have any questions in connection with these new requirements, please do get in touch.