Companies House reform : identity verification (IDV)

Companies House, will be implementing a new identity verification process to help deter those wishing to start companies for illegal purposes.

What is Identity Verification ?  

Identity verification (IDV) is the process of confirming that a person is who they claim and is one of the significant measures being introduced under the Economic Crime and Corporate Transparency (ECCT) Bill.

The ECCT Bill is currently in the final stages of its passage through parliament awaiting consideration of amendments and Royal Assent.

Who will be affected ?

The changes will affect anyone setting up, running, owning or controlling a company in the UK who will need to verify their identity to prove that they are who they claim to be. It will also apply to corporate general partners of limited partnerships and individual directors of corporate directors, increasing transparency and limiting their potential for misuse. 

For new companies and other registerable legal entities, this will mean that all directors (or equivalent) and people with significant control (PSC), will need to complete identity verification before, or as part of the company incorporation process.

For existing companies on the register, all directors (or equivalent) and PSCs will need to verify their identity within a set period, to be set out within secondary legislation.

How Identity Verification will work at Companies House

There will be two methods of identity verification and both will achieve the same level of identity assurance.   You will be able to verify directly with Companies House or through an Authorised Corporate Service Provider (ACSP):

• Verifying directly with Companies House will mainly be via a digital service that links a person with their primary identity document, such as a passport or driving licence. Alternative methods will be available for those who cannot use or access a digital service.
• Verifying through an Authorised Corporate Service Provider (ACSP) will involve using an intermediary such as an accountant, legal adviser, or company formation agent.

When will the changes come into effect ?

Once the ECCT Bill becomes law, Companies House will be communicating with companies to inform them of their new obligations in advance of these new requirements taking effect. They will also be preparing the processes for identity verification to be undertaken by Authorised Corporate Service Providers (ACSPs). 

You can find updates on the Bill’s passage through Parliament on the UK Parliament website and you can keep up to date with the implementation by signing up to receive email updates direct from Companies House here.

How can Haines Watts help?

We advise clients on a large range of matters relating to all forms of companies that are incorporated and registered with Companies House throughout the East Midlands region.  

If you would like to have a conversation about any of the above, please do get in touch with your local Haines Watts office today.