The Government has published the Corporate Transparency and Register Reform White Paper which will significantly transform the corporate landscape and assist in the fight against economic crime.
Key areas of proposed reform include the following:
Registrar of Companies Enhanced Powers
The Registrar is to be given a new statutory function in promoting and maintaining the integrity of the register. This is significant as it will mark a departure from the current situation where the Registrar is obliged to accept all filings that are “duly made”. The Registrar will be able to question filings on a discretionary risk-based assessment. All information supplied to the Registrar in the future and all information already on the register will be within the scope. Companies House is developing systems to improve detection of suspicious activity.
The Registrar will be able to seek verification of ID checks before accepting documents for filing. Identity verification will extend to directors (including directors of overseas companies), people with significant control, directors of relevant legal entities, individuals filing information on a company’s behalf, general partners of LPs and members of LLPs.
Corporate directors will no longer be permitted to act unless all directors of that company are themselves natural persons and have been subject to an appropriate identity verification process.
The Registrar will be able to share relevant information with law enforcement and other public and regulatory bodies, in certain circumstances. There will also be a power to cross-reference data with external data sets and an increase in discrepancy reporting.
Information on all dissolved company records for the past 20 years will be made freely available, subject to appropriate safeguards to individuals’ personal information.
Improvements in Financial Information
There will also be improvements regarding the financial information filed at Companies House, including enhanced validation checks (such as checking for consistency with accounts submitted to other relevant agencies), requiring accounts to be submitted in digital format using the industry standard Inline Extensible Business Reporting Language, and requiring the information to be fully tagged.