Companies House will be reformed to clamp down on fraud and money laundering, with directors unable to be appointed until their identity has been verified.
The changes announced by the government aim to increase the reliability of the data showing who is behind each company. This will mean that businesses will have greater assurance when they are entering transactions with other companies, such as when small businesses are consulting the register to research potential suppliers and partners, the government said.
It will also improve the ability of law enforcement agencies, such as the National Crime Agency, to trace their activity for suspected fraud or money laundering. Identity verification will take place through a fast, efficient, digital process and is expected to take a matter of minutes.
These reforms will not impact on the typical speed at which a company or organisation is formed and other filings are completed. Most companies will be able to be incorporated easily within 24 hours as is the case now, according to Companies House.
Data on Companies House informs many transactions between businesses and underpins credit scores and lending decisions. Register data was accessed 9.4 billion times in the last year, and research suggests it is worth up to £3 billion per year to users.
The government’s full response to the Corporate Transparency and Register Reform consultation has now been published. The reforms will give Companies House more powers to query and reject information, to improve the quality of data on the register, as well as affording users greater protections over their personal data, to help protect them from fraud and other harms.
Where any new controls are introduced, Companies House will keep the burden on business as low as possible and will continue to look for ways to make incorporation and access to its services as smooth as they can be.
Louise Smyth, chief executive of Companies House, said: “We are pleased that these significant and far-reaching changes are being announced. We know how valuable our data is, not just to businesses but to law enforcement and these reforms will unlock that value even further.
“Driving confidence in the UK economy is at the very heart of our plans to modernise Companies House, and we already have a substantial transformation programme in place to bring the government’s ambition to life.”