Identity Verification of Persons with Significant Control
As with directors, People with Significant Control (PSCs) will be required to verify their identity. However, there are some key differences in relation to the verification process of PSCs as opposed to directors.
Once PSCs are identified by a company, the information can be submitted to Companies House (CH) for the relevant PSCs to be added to the register.
Individual PSCs will have a 14-day period after registering in which to verify their identity.
Relevant Legal Entities (RLEs) will have a 28-day period in which to verify and for RLEs, one ‘relevant officer’ of it should be verified. The relevant officer must be a natural person; if a company it must be a natural person, if it is an entity with affairs managed by its members, it must be a member, and for anyone else it must be an officer (most likely to be a company director).
PSCs can be notified to CH in either the statement of initial significant control (SISC) on formation or in a notice delivered to CH after formation.
If a PSC is an individual, the SISC or notice may, but does not have to include a statement that the individual’s ID is verified. If the PSC is a legal entity, the SISC or notice may but does not have to include two statements – one specifying the name of the relevant officer, who is an individual whose ID is verified, and another by the relevant officer confirming that they are the relevant officer.
For those PSCs that remain unverified, CH will follow up to get verification and the relevant statements from the PSC. The company does not need to do anything further.
This optionality means companies need to think about the timing of PSCs verification and if PSCs are to ID verify only when contacted by CH, PSCs will need to be alerted by the company that this is the process that they are adopting.
Advance verification/Already verified
PSCs may have chosen to verify in advance of registration, in the same way as directors. In addition, some PSCs will already have a verified account with CH (for example if they are a director of the company in question or another company), if this is the case, they will not need to reverify and the registration will link to their existing account. The PSC will then be flagged as “verified” on the companies register.
Not already verified
If the PSC doesn’t have a verified CH account, CH will notify the PSC and the company of the requirement that the PSCs must verify their identity. Provided the PSC provides all relevant information within the set period, the PSC will be flagged as “verified” on the companies register. However, if the PSC within the set period after registration does not verify their identity, CH will annotate the register to show that the PSC is “not verified”. The PSC will have committed a criminal offence and may be liable to a civil penalty. It is also expected that if PSCs are not verified within a short time after the incorporation of a company, they will commit a criminal offence.
There will be a transition period during which existing PSCs will be required to verify their identity (in the same way as existing directors).
As with directors, there is still some uncertainty as to the timetable for ID verifying existing PSCs. The government has stated that there will be a transition period within which existing PSCs must verify their identity. It is expected that PSCs will be provided with time to comply with the new requirements. The timetable will be set out through secondary legislation and guidance.
The consequences of non-compliance with the ID verification requirements will depend on the circumstances. However, failure to verify identity could result in criminal proceedings, civil penalties, the incorporation or registration of a new company being rejected, the company being unable to file statutory filings and the public register being annotated to show the PSC’s status as “unverified”.