Companies House – Draft ID Verification Rules

Companies House has recently released draft rules for identity verification. These draft rules are part of the Economic Crime and Corporate Transparency Bill which is leading the Companies House reform.  The aim of the verification rules is to increase transparency over UK companies and improve the accuracy of information on the Companies House register.

What is identity verification?

Identity verification is the process of confirming that a person is who they claim to be. It usually involves an identity document, such as a passport or driving licence. However, with advancements in technology, this process can also now be done digitally, often using just a smartphone.

The purpose of the draft rules

The draft rules set out the contact information, personal information, and types of evidence an applicant must provide when applying for verification of their identity with Companies House.

Required information and evidence

According to the draft rules, an applicant must provide a valid email address and their current residential address. Additionally, they must provide either one or two pieces of evidence from the approved lists when applying for verification of their identity. The number of pieces of evidence will depend upon the verification route being taken.

Who does the verification process impact

The verification process being adopted by Companies House is designed to deter those wishing to create a company for illegal purposes and thus hide their identify, with anybody setting up, running, owning, or controlling a company in the UK needing to verify their identity.

For new companies, all directors, and people with significant control (PSC) will need to complete identity verification as part of the company incorporation process.

For existing companies, all directors and PSCs will need to verify their identity within a set period, to be confirmed. This will include anybody acting on behalf of companies needing to also verify their identity before they’re able to file information.

How will the identity verification work at Companies House?

Companies House state that they aim to make identity verification as easy as possible.

There will be two routes to choose from, and both will achieve the same level of identity assurance:

1. You will be able to verify directly with Companies House; or
2. You will be able to verify through an Authorised Corporate Service Provider (ACSP).

Verifying directly with Companies House will involve creating an account and linking an individual with a primary photo identity document, such as a passport or driving licence. The system will then take a photo of the individual’s face and compare the two images. This may also involve a check against other government databases.

Anybody verifying with an ACSP will need to provide biometric ID plus one other form of ID. The biometric ID includes: a biometric readable passport; a photocard driving licence; EU or EAA identity card with biometric information; or a UK biometric residence permit or card.

Summary

The draft ID verification rules by Companies House mark a significant step towards increasing transparency and combating economic crime. By implementing these rules, Companies House aims to ensure that only legitimate businesses with identified directors and PSCs are registered, thereby enhancing trust in the UK business environment.