Since the first raft of company law changes implementing parts of ECCTA came into force a little over a year ago, new and enhanced powers have enabled Companies House to query and remove false, misleading or incorrect information from the company register and have laid the groundwork for more comprehensive changes this year.
Further changes set to come into force in 2025 will require companies registered in the UK to comply with enhanced regulations regarding interaction with, and submission of information to, Companies House.
Later this year, the new ‘failure to prevent fraud’ criminal offence will come into force, holding companies accountable if an 'associated person' of the business commits any of the wide range of fraud-related offences in scope with intent to benefit the business or a client. The only defence is having the right type of compliance procedures in place to prevent the misconduct. You can read more about this and the key practical takeaways from the UK Government’s official guidance on the new offence.
Looking ahead, what other changes can we expect this year?
Identity verification
In changes that will impact every UK registered company, ECCTA mandates new identity verification requirements for directors, persons with significant control (PSCs), relevant officers of a registrable relevant legal entity (RLE) and members of limited liability partnerships. Once in force, a director will not be permitted to act, and companies must ensure that a person does not act, as a director, unless their identity has been verified. Companies House estimates that more than seven million individuals will need to go through these checks. This measure aims to increase transparency and accountability within corporate structures.
Post-incorporation, a newly appointed director must verify their identity as soon as possible and before their appointment is notified to the registrar. If PSCs or relevant officers of a registrable RLE are not verified within a short time after they have become a PSC or registrable RLE (as the case may be), they too will commit a criminal offence.
There will be two routes for identity verification:
- Direct verification via Companies House through the GOV.UK ID check app, the One Login web journey or at a Post Office (for those who have UK ID documents or biometric evidence).
- An indirect verification route through an Authorised Corporate Service Provider (ACSP), which may be supported by an identity interview (for those who do not have UK or biometric evidence).
Applicants will be required to supply certain ‘required personal information’, ‘required evidence’ and ‘required contact information’. Those resident outside the UK must provide government issued evidence as their primary document.
For indirect identity verification via an ACSP, similar evidence will be required. In order to verify the individual’s identity, the ACSP must be satisfied that the required personal information is true. Once the ACSP is satisfied that the individual’s required information and evidence are true, it may deliver a verification statement to the registrar, which has the effect of changing the individual’s status from “unverified” to “verified”.
Companies House has now opened up applications for entities wishing to become Authorised Corporate Service Providers (ACSPs), and individuals who wish to voluntarily verify their identity may do so from April 8, 2025.
By autumn 2025, Companies House is expected to make identity verification a compulsory part of incorporating a new company and for appointing new directors and PSCs. Additionally, a 12-month transition phase will commence for existing companies, requiring existing directors and PSCs to verify their identity when the company’s confirmation statement is due.
From spring 2026, Companies House is expected to begin to enforce identity verification for all presenters of information, making it a compulsory aspect of filing any document.
Individuals who have had their identity verified will be given a Unique Identifier Number (UIN) which they can use in relation to all companies that they are involved with. This means that individuals who hold more than one position will only need to have their identity verified once. Companies House also expects identity verification to be a one-off requirement which will not require “reverification” unless the registrar has reasonable cause to believe that information or evidence relied on in relation to identity verification is misleading, false or deceptive. In such instances, the individual will cease to be an individual whose identity has been verified until their identity has been reverified.
What else is changing?
From spring 2026, it is anticipated that there will be new restrictions on who is authorised to file documents at Companies House on behalf of companies. This will ensure that only verified and authorised individuals can submit company information and is intended to reduce the risk of fraudulent activities. Once these restrictions are in force, verification of the identity of presenters of information to Companies House will be a compulsory part of filing any document, and third-party agents filing on behalf of companies will be required to be registered as an ACSP.
Following the implementation of restrictions on corporate directors (the date for which is, as yet, unconfirmed), the use of corporate directors will also be restricted so that a corporate director may only be appointed if all the directors of that corporate director are natural persons who have had their identity verified.
What can companies do now to prepare for the upcoming changes?
To ensure compliance and a smooth transition, companies should start to consider the following steps:
- Review current practices: Evaluate existing procedures for submitting information to Companies House and identify areas that will require updates to procedure to meet the new requirements.
- Identity verification: Establish which individuals will need to have their identity verified and begin to compile details of documentation required. In advance of compulsory identification verification, individuals may wish to verify their identities voluntarily ahead of the mandatory requirements coming into effect.
- Update record-keeping: Review and consider changes to align company record-keeping practices with the new standards to ensure accuracy and compliance.
- Train staff: Educate directors and employees about the new requirements and the importance of compliance to prevent fraud and other economic crimes.
- Stay alert to change: Stay informed about the latest updates and guidance from Companies House and the Home Office to ensure timely compliance with the phased implementation timeline.
By taking proactive measures now, companies can better prepare themselves for the forthcoming changes and ensure they remain compliant.
