The UK government is consulting on new proposals to increase the amount of personal information that companies are required to disclose to Companies House, and to allow it to be cross-checked against other registers.
Companies House already maintains a public register of beneficial ownership, as well as basic information about companies and their officers. The basic companies register records over four million limited companies, and was accessed 6.5 billion times in 2018. However, there has been some criticism that the information provided by company officials for these registers is not always reliable, and is of limited use for deterring the abuse of corporate entities.
Under the proposals, Companies House will be given extra powers to conduct identity checks on those who set up, manage and control companies, and to query and verify the data placed on the companies register by comparing it with corporate data held by other public and private sector bodies. The data would include fraudulent audit reports, where companies falsely claimed that their annual accounts had been audited by well-known audit firms; and details of individuals being fraudulently appointed, or companies providing false addresses.
New offences and sanctions will be introduced to enforce the new measures, which will generally apply to any corporate body subject to the disclosure requirements of the Companies Act 2006. This includes private and public limited companies, unlimited companies, unregistered companies and overseas companies, as well as limited liability partnerships and limited partnerships. Some of the changes will also apply to entities captured under the draft Registration of Overseas Entities Bill. Beneficial owners or ‘people with significant control’ of such entities, and in some cases the managing officers, will be expected to undergo identity verification.
The Parliamentary Under-Secretary of State for Small Business, Consumers and Corporate Responsibility, Kelly Tolhurst, said that the proposals would help counter money laundering and would improve protections for entrepreneurs and directors from fraud.
They will also address the Financial Action Task Force’s recommendations in its recent evaluation of the UK’s anti-money laundering regime, which ranked the UK as leader in the fight against money laundering, but identified some areas in need of improvement.
Not all of the additional information will be made public, however. Extra measures will be introduced to protect the personal information on the register, which gives details of 6.7 million people. In the past three years, nearly 10,000 of these have complained to Companies House about the publication of their personal details, with the associated risk of fraud. Directors will be given rights to conceal their personal home addresses, although this information will still be available to public authorities.