New Director Identity Verification Requirements

The Government has published a White Paper on the reform of Companies House. At present, the identity of any individual whose name is filed at Companies House does not need to be verified. Under the reforms, Companies House will, amongst other things, be given greater powers in relation to identity verification requirements that will be introduced for all new and existing company directors. Directors who do not verify their identity will commit a criminal offence and/or incur a civil penalty. Companies that have an unverified director will also commit an offence.

Considering this proposed change, companies may wish to get into the habit of verifying the identity of each of their directors, existing and new, as part of their own internal processes and to facilitate the identity verification requirements of Companies House.

A new template letter and accompanying form, that may be sent to a director, requesting they prove their identity, have been created. Identity verification must be by valid photographic ID.

Note that all information received should be collected, held and processed in compliance with UK General Data Protection Regulation (UK GDPR). The company will need to identify a lawful basis for processing personal data and ensure that this can be justified. Complying with a legal obligation will fulfill this. More information is available on the ICO’s website here.

As these requirements also apply to equivalent entities, a similar letter and form have also been created for a limited liability partnership (LLP).

It is expected that these reforms of Companies House will become law later this year.