In September the Government published its response to a consultation on Corporate Transparency and Register Reform. The Government’s response has set out a number of suggestions to improve corporate transparency along with improvement of the reliability and accuracy of information set out on Companies House.

There are four key areas the Government has identified for reform which as follows:

Knowing who is setting up, managing and controlling corporate entities

The Government will:

• introduce compulsory identity verification for all directors and People with Significant Control (PSC) of UK registered companies
• introduce compulsory identity verification for all individuals who file information on behalf of a company; and
• continue to allow company incorporations and filings to be made either directly at Companies House or via an agent. But in future only properly supervised agents will be able to file information. They will be required to provide evidence of the verification they have undertaken, and Companies House will avoid duplicating identity checks.

Improving the accuracy and usability of data on the companies register

The Government will:

• allow Companies House to query information that is submitted, rather than having to accept information that is validly submitted
• to improve accuracy, broaden the powers of the Registrar of Companies to remove information from the register in certain circumstances
• consult on proposals to introduce full iXBRL tagging for the submission of accounts by companies to Companies House
• tighten regulation on amendments to companies’ accounting reference periods; and
• review some broader aspects of accounts filings, including the exemptions that allow companies to submit micro or dormant accounts.

Protecting personal information

The Government will remove restrictions to enable personal information to be removed from the register.

Ensuring compliance, sharing intelligence, other measures to deter abuse of corporate entities

The Government will:

• introduce an obligation on bodies that fall under the Anti-Money Laundering (AML) regulations to report discrepancies between the public register of companies and the information they hold on their customers;
  permit cross-referencing of Companies House data against other data sets
• give Companies House power to query, and possibly reject, company names before they are registered.

Lord Callanan, Minister for Climate Change and Corporate Responsibility states that the goal of the reforms are to:

“…improve the accuracy of the information on the register and give the Registrar much greater powers”

He goes on to add:

“The reforms will support my ambition of making the UK the best place in the world to start and grow a business. The reforms will bring many benefits to businesses through streamlined and digitised processes and an improved user experience, reflecting the needs of business in the 21st century economy. The impact on overall speed of incorporation and other filings will be negligible: we still expect the vast majority of companies to be able to incorporate easily within 24 hours. Costs will remain low by international standards. Where more information is being sought from companies, for example for identity verification, technological solutions will ensure that additional burdens on business and individuals are kept to a minimum.”

From the list above, it is clear that the Government is looking to provide Companies House with a raft of new powers to ensure transparency of owners of companies and to help avoid mistakes being made when filings are submitted and to help combat fraud. Companies will need to take care not to make mistakes, as there will be an added level of review of forms being filed at Companies House. Whether this may mean a delay in the speed at which Companies House filings completed are yet to be seen. We wait in anticipation of the changes and would advice all companies to review in detail all filings once the reforms have been implemented.

Please contact Moorcrofts’ Corporate Team if you would like further information on the reforms and what this may mean for your company.