Companies House ID verification rules and recent changes
As the net continues to tighten on corporate fraud, a range of public bodies, such as Companies House, are instigating additional protective measures. While this will add to the expense and the information required when setting up and managing a company, there are significant long-term benefits. Your accountant will be aware of the changes, but having some background knowledge about your obligations as a company director is also useful.
New legislation
As part of a raft of new changes at Companies House, draft ID verification compliance rules have been released. While still encouraging and supportive of entrepreneurial spirit, it’s important to reduce the risk of fraudulent activity and rogue directors retaining positions of influence. Looking at the broader picture, this will help create a more trusting and lawful environment in which to set up and manage companies going forward.
ID verification for directors
The draft ID rules are part of Regulation Five of the Registrar Regulations 2024 draft statutory act. There are a number of issues to take into consideration, which include:-
Email address
All directors must provide a current residential address and a valid email address. This not only enhances the identification process but also ensures prompt communication between directors, companies, and Companies House.
Proof of identity
Each director must also provide proof of identification that “cannot be expired”. While biometric and photographic evidence are preferred, this may not be possible for all parties. Consequently, some of the more traditional ID documentation will also be considered.
Methods to complete ID verification
As the digital age continues to influence more areas of personal and business life, Companies House offers three different identification routes.
Using the GOV.UK ID Check app
As the use of apps continues to increase, it is no surprise to learn that there is now an electronic identification process available through Companies House. The service acknowledges the following forms of identification:-
- Passport with a biometric chip
- UK photocard driving licence
- UK biometric residence permit
- UK biometric residence card
- UK frontier worker permit
While this is the quickest route to verifying the identity of company directors, it may not be appropriate for all participants.
GOV.UK One Login
The GOV.UK One Login service is a useful option for those setting up a company through Companies House. Bringing together a range of government accounts and services that individuals may use provides a quick and efficient method of verifying a person’s ID. There are two main documents used with this service:-
- UK passport
- UK photocard driving licence
While this article focuses on Companies House, it’s interesting to note that GOV.UP One Login is also being used by third parties in the private sector.
Post Office
Unfortunately, with a growing number of post offices either merged or closed down, this may be a challenging last resort for some directors – you may need to travel some distance! The following documentation will be accepted to provide proof of identification:-
- Passport with a biometric chip
- Passport without biometric chip (supported countries)
- UK/EU photocard driving licence
- UK biometric residence permit
- ID photo cards from EEA countries (incorporating biometric chips)
As you can see from the three options above, there is a strong emphasis on biometric data while also appreciating more traditional methods.
Additional options to verify ID
Even though the above options will cover the vast majority of directors seeking verification through Companies House, there may be situations where these are not available. Other documentation which will be considered includes:-
- Photo ID on the PRADO register, which includes a driving licence or home country national ID card
- A birth certificate, immigration documentation, marriage certificate or bank statement
There are also growing instances of people applying to verify their ID using Authorised Corporate Service Providers (ACSP). When using this method, there is a list of biometric options or a valid photo ID with accompanying documentation certifying your identity.
Companies House, along with other government and public bodies, is moving towards digitising services and electronic communication. However, there will always need to be some kind of fall-back option for those who may not have access to such services or the electronic/digitised information required.
More recent changes to Companies House
As we await the Companies House ID verification rules to be drafted into law, it’s useful to recap other recent changes.
Statement of lawful purpose
While many will see this as more administrative than regulatory, companies are now required to confirm that their activities are lawful. This move will strengthen corporate accountability and it also clarifies the legal basis upon which companies have been formed.
Enhanced powers for registrars
In a welcome move, recent legislation has also enhanced the powers of the Registrar Of Companies to query and challenge information held on the register. A means of maintaining more accurate data within Companies House, these powers can also help to identify potential fraudulent activity.
Digital filing
Originally, mandatory digital filing was expected to take effect in 2025, but this has been delayed to 2026 (and possibly beyond). However, it is coming, and it will certainly create a more efficient means of communication and lodging documentation.
Looking to the future of Companies House
Prior to the ongoing raft of changes, Companies House regulations had remained relatively untouched for 180 years. While we have certainly seen changes in the last few years, there’s much more to come with a greater dependence on AI-based services going forward. This is yet another string to Companies House’s bow, allowing huge amounts of data to be analysed, identifying potential issues, and, above all, reducing instances of fraud and illegal activity.
The ongoing regulatory adjustments give more power to Companies House and associated parties, but they will also open the door for more in-depth use of AI in the future. There’s a lot going on!
Companies House Identity Verification – Conclusion
Ongoing changes to Companies House rules and regulations have not only brought the body up to date but also prepared it for future changes. A greater emphasis on digitised data and automated services, together with the introduction of AI and machine learning, is having a huge impact, but this is just the tip of the iceberg. Consequently, as a company director, you must be aware of your expanding obligations towards Companies House and broader legislation.
Our team of seasoned experts is here to navigate you through the ever-evolving landscape of company registration and management. Staying informed about your obligations is crucial, but ensuring that all necessary documentation is completed and submitted on time is equally important. Missing these deadlines could result in hefty fines and operational penalties, jeopardising your business’s long-term success.
We can help you stay compliant and secure your business’s future. Contact us today to discuss your situation in more detail.