Companies House Changes

IMPORTANT UPDATE: UPCOMING CHANGES TO IDENTITY VERIFICATION REQUIREMENTS AT COMPANIES HOUSE

Significant changes to identity verification (IDV) requirements at Companies House are on the horizon, introduced under the Economic Crime and Corporate Transparency Act 2023 (ECCTA).

These reforms are designed to boost corporate transparency, combat economic crime, and maintain the integrity of the public register by verifying the identities of those involved in establishing, managing, owning, or controlling UK companies.

These obligations will become mandatory from 18 November 2025, and we strongly advise directors, shareholders with more than 25% voting rights, and other affected parties to prepare now to avoid delays and potential penalties. Failure to comply could lead to filing restrictions, fines, director disqualification, or even company strike-off. We view these as some of the most substantial shifts in company law since the Companies Act 2006.

In Summary

If you serve as a director or hold more than 25% of a company’s voting rights, prioritize completing the Companies House IDV process immediately. This will help sidestep anticipated bottlenecks when verification becomes compulsory in November 2025. Non-compliance may result in operational disruptions, penalties, and severe consequences for both individuals and companies.

Who Is Affected?

The IDV requirements impact various individuals and entities linked to UK companies, applying to both new and existing roles. Here’s a detailed overview:

• Directors (and Equivalents): All directors of UK companies, including LLP members, general partners, and managing officers, must verify their identity. Corporate directors (e.g., companies or LLPs acting as directors) are currently exempt but will be included in future phases.
• Persons with Significant Control (PSCs): These are individuals or entities with substantial influence over the company, such as those who:
  • Hold more than 25% of shares or voting rights.
  • Can appoint or remove the majority of the board.
  • Exercise significant influence or control through other means.

All PSCs, new or existing, must verify. Corporate PSCs (also known as Relevant Legal Entities or RLEs) and their officers will face IDV requirements later.

• Shareholders: Standard shareholders without PSC status are not required to verify. However, those with over 25% shares or voting rights (or qualifying as PSCs) must comply. We recommend reviewing your share register to spot any who may need to act, especially if holdings change.
• Other Relevant Parties: Future expansions will cover individuals filing company documents (e.g., secretaries or authorised filers), limited partnerships, and corporate entities as directors or PSCs. Companies using third-party filing agents may need them to register as Authorised Corporate Service Providers (ACSPs). Overseas entities with UK establishments could see their directors affected.

Timelines and Transition Periods

Companies House has implemented a phased rollout to facilitate compliance:

• Voluntary Verification (Available Now): Since 8 April 2025, individuals can verify voluntarily. We urge early action to prevent delays.
• Mandatory for New Appointees (From 18 November 2025):
  • New directors must verify before appointment filings or company incorporations.
  • New PSCs have 14 days post-notification to Companies House.
• Transition for Existing Appointees (12-Month Window Starting 18 November 2025):
  • Existing directors must submit verification details (a unique personal code) in the next annual confirmation statement after this date.
  • Existing PSCs get a 14-day window starting from:
    • The company’s next confirmation statement (if also a director).
    • The first day of their birth month (as recorded) if not a director.

This provides up to 12 months for most to comply, based on filing cycles. Missing deadlines could block filings, incur civil penalties (up to £10,000 initially), or lead to criminal charges and director disqualification.

How to Verify Your Identity

IDV is typically a one-time process, yielding a unique “Companies House personal code” for ongoing use. Re-verification may be required in certain cases. Options include:

1. Direct Verification via GOV.UK One Login (Free):
   • Access the online service, which might involve an app, security questions, or a Post Office visit with photo ID (e.g., passport or driving licence).
   • Suitable for global users, though some methods require UK-based documents. For more, visit: GOV.UK One Login Identity Proofing.
2. Through an Authorised Corporate Service Provider (ACSP):
   • ACSPs like accountants, solicitors, or formation agents can manage verification. They must be AML-supervised and Companies House-registered (applications opened 18 March 2025).
   • This may involve fees but is ideal for convenience, especially internationally. As a trusted law firm, we can serve as your ACSP and handle the process efficiently.

Avoid sending originals to Companies House—everything is handled digitally or through approved methods.

Next Steps for Compliance

To stay ahead and reduce risks, consider these steps:

1. Review Your Records: Examine directors, PSCs, and shareholders using your share and PSC registers. Contact us if PSC status is unclear.
2. Plan Early Verification: Prompt affected parties to verify now via GOV.UK or an ACSP to beat the rush.
3. Update Confirmation Statements: Incorporate IDV into post-18 November 2025 filings. We can assist with preparation and submission.
4. Monitor Changes: For new directors or PSCs after the deadline, ensure prior verification.
5. Seek Expert Guidance: Non-compliance risks fines and disruptions. Our team at SJP Law offers:
   • ACSP services for seamless verification.
   • Corporate structure reviews for compliance.
   • Personalized ECCTA advice.

Contact your dedicated advisor at our firm, or reach us at 01482 324591 or [email protected] to discuss support. We’re dedicated to guiding your business through these reforms smoothly.