As reforms continue to reshape how businesses operate in the UK, identity verification has emerged as a pivotal aspect of business compliance. It may appear like another paper-pushing requirement, but identity verification is heading in the direction of something much more significant than that: protecting the integrity of the UK business environment.
Learn about what identity verification is, why Companies House developed it, and how it affects individuals involved in company formation or management. Having an understanding of its purpose can help companies avoid potential issues and stay one step ahead of the ever-evolving compliance needs.
The Purpose Behind Identity Verification
The reason behind the need for ID verification is to make sure that the people who are registering or owning companies are who they say they are. It’s not just about ticking off boxes— it’s to help stop fraud, financial crime, and corporate abuse.
Previously, Companies House allowed company formation with very little background checks. This tolerance allowed fraudsters and crooks to set up phantom or misleading companies. By requiring the relevant people to verify their identity, Companies House aims to clean up the register and discourage such people.
Who Has to Be Verified?
The need for ID verification is placed upon several parties that are involved in the management or registration of a company, including:
- Directors and Persons with Significant Control (PSCs)
- Company Secretaries (as appropriate)
- Members of LLPs and Limited Partnerships
- People filing documents on a company’s behalf
These people are required to perform identity checks prior to being registered. In the case of unsuccessful verification, their appointment will not be accepted by Companies House.
How Identity Verification Works
ID verification is typically done online. Individuals can authenticate themselves directly with Companies House or with the help of an Authorised Corporate Service Provider (ACSP), for example, an agent or accountant.
The latter typically involves posting a scan of a government ID document, and a live image or video to check liveness. The system cross-checks the two and authenticates.
If carried out through an ACSP, the provider becomes responsible for ascertaining the person’s identity and making sure it is of adequate standard.
Wider Impact on Firms
Although the process of ID verification is short and simple, it has quite a wide range of implications. Identity verification helps inspire transparency and restore trust in UK companies. For honest firms, this translates to a more genuine marketplace and a more even playing field.
It also protects directors and shareholders against identity fraud. Previously, one’s name was illegally registered against one’s will. Today, the system stops unauthorised appointments.
These checks also allow Companies House to be more active in its gatekeeping function. This is a departure from its former role as a passive registrar to one that is a data integrity-focused and a corporate governance-focused authority.
Navigating the Change
For most cases, these requirements are the biggest change in the Companies House Identity Verification procedures in decades. New directors, foreign officers, and agents that deal with multiple companies will have to learn quickly.
The plus point is that, once approved, an individual’s ID remains valid for future submissions unless there is a significant change. However, companies need to organise internal procedures to ensure timely compliance and to prevent delays in appointments.
Working with an authorised agent can simplify the process. These professionals not only manage identity verification but also help with broader compliance tasks like filing annual accounts or maintaining statutory registers.
Conclusion
ID verification isn’t just a simple requirement — it’s a way of improving transparency, trust, and security. By understanding its purpose and planning ahead, companies not only meet their legal obligation but also help in creating a safer corporate world.
As the UK continues to improve its business register, these measures will soon become more crucial for company registration. Implementing them ahead of time is not just about being time-efficient— it’s equipping oneself with the right tools to future-proof your business operations in the face of rapidly changing regulation.
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