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  • Paul Clifton

Reforms on director appointed at Companies House to help reduce fraud

Companies House will be reformed to clamp down on fraud and money laundering, with until their identity has been verified.

Companies House issued a Press release on 24 September 2020 confirming its intention to reform and clamp down on fraud and money laundering. As a result directors will not be unable to be appointed until their identity has been verified by Companies House.

This will mean that:

  • compulsory identity verification will be introduced

  • Companies House will have greater powers to review, investigate and remove incorrect filings

  • The changes should give greater confidence to those doing business with companies and assist with greater accuracy of the data file on the register at Companies House, without affecting the underlying service speed.

It should also help improve the ability of the law enforcement agencies to trace those suspected of fraud or money laundering. Identity checks should be made expeditiously through a digital process which is expected to only take a matter of minutes.

The changes should not affect the typical speed in which a new company is formed or other filings are accepted.

The Minister for Corporate Responsibility Lord Callanan said ‘Mandatory identity verification will mean criminals have no place to hide, allowing us to clamp down on fraud and money laundering and ensure people cannot manipulate the UK market for their own financial gain, whilst ensuring for the majority that the processes for setting up and running a company remain quick and easy’.

Companies House say that they will keep the burden on business as low as possible.

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