Identity verification is becoming a crucial aspect of compliance for businesses in the UK as reforms continue. Identity verification may seem like just another requirement to fill out forms, but it is actually a much more important step in protecting the integrity and business environment of the UK.
Discover what identity verification is and why Companies House created it. Also, learn how it impacts individuals involved in the formation or management of a company. Understanding its purpose will help businesses avoid issues and stay ahead of ever-changing compliance requirements.
What is the purpose of identity verification?
ID verification is necessary to verify that people who register or own companies are indeed who they claim to be. Not only are we checking boxes, but also preventing fraud, financial crimes, and corporate abuse.
Companies House used to allow company formations with minimal background checks. Previously, Companies House allowed fraudulent or misleading companies to be set up by fraudsters.
Companies House wants to keep the register clean and deter such people by requiring them to prove their identity.
Who Must Be Verified
The requirement for ID verification applies to several parties involved in the registration or management of a business, including:
- Directors and Persons with Significant Control
- Company Secretaries
- Members of Limited Partnerships and LLPs
- Filing documents on behalf of a company
Before registering, these people must undergo an identity check. Companies House will reject their appointment if the verification fails.
How Identity Verification Works
Online ID verification is the norm. Individuals can authenticate directly with Companies House, or through an Authorised Corporate Service Provider.
In order to verify that the image is live, you can post a scanned copy of an ID card and a video or live image. The system authenticates by cross-checking the two.
When using an ACSP, it is the provider’s responsibility to verify the identity of the person and ensure that the standard is adequate.
Companies are affected by a wider range of impacts
The process of ID Verification is simple and quick, but it has a lot of implications. Identity verification can help restore trust and transparency in UK businesses. This means a fairer marketplace for honest companies.
Also, it protects shareholders and directors against identity fraud. In the past, names were illegally registered without consent. The system now stops all unauthorised appointments.
Companies House can also be more proactive in its gatekeeping role with these checks. It is no longer a passive registrar, but a more active authority that is focused on data integrity and corporate governance.
Navigating Change
In most cases, this is the most significant change to the Companies House identity verification procedures in many decades. The new directors, foreign officers and agents who deal with multiple companies must learn fast.
A plus is that once an ID is approved, it remains valid until a major change occurs. Companies must organise their internal procedures in order to comply with the law and avoid delays.
The process can be simplified by working with a licensed agent. These professionals can help with more complex compliance tasks, such as filing annual accounts and maintaining statutory records.
The conclusion of the article is:
ID verification is not just a requirement. It’s also a way to improve transparency, security, and trust. Understanding its purpose and planning in advance will help companies to not only comply with their legal obligations but also create a safer workplace.
These measures will become increasingly important as the UK improves its business register. It’s not only about saving time, but also equipping yourself with the tools you need to ensure your business is future-proofed in the face rapid changes in regulation.
