The UK government has introduced new identity verification rules for directors and owners of companies registered in the United Kingdom. The new law, expected to be enforced shortly, will impact both directors and owners of existing and newly formed UK companies. Under the new rules, directors, and owners will have to verify their identity at Companies House. The new rules, currently in the form of the Economic Crime and Corporate Transparency Bill, will be introduced soon, exactly when is yet to be announced. Currently, the legislation is passing through various stages in the UK Parliament so could become law in the next few months. The new rules will apply to
Directors and owners of companies registered in the UK
Directors and owners of companies operating overseas but registered with Companies House.
. New and existing companies.
Members and partners of LLPs and Limited Partnerships
Lawyers and Secretarial service providers filing with the Registrar
In the Economic Crime and Corporate Transparency Bill context, a company owner means a person or entity required to register as either a Person with Significant Control (PSC) or a relevant legal entity (RLE) under existing business laws. It is likely to mean an individual or an organization holding 25 percent or more of the Company. It is expected that company owners will be able to verify their identity through the Companies House, or at an Authorised Corporate Service Provider.
As far as verifying identity with Companies House goes it is likely to mean creating an account using a primary photo identity document, such as a passport or driving license. The same will be verified by checking the individual's data in government databases. It is expected that the process will take only a few minutes. After the director has a verified account, they will obtain the credentials needed for all existing and new director appointments. Authorized Corporate Service Providers (ACSPs) means lawyers, accountants, agents, and other intermediaries. All UK-Registered organizations must comply with the new rules. Non-compliance will be treated as a criminal offense. The company will not be able to appoint any new directors until they are verified.
The new rules also entail that companies have an appropriate address for their registered office.
This address must be able to receive any document addressed to the company by an authorised person.
The delivery of any document must be recorded through an acknowledgment of delivery.
To meet these requirements, overseas business owners must have an employee permanently based in their registered office. All companies must also furnish their email address so the registrar can communicate with them digitally.
Companies or LLPs that act as directors will be allowed to register under the new rules subject to the following:
Under the new rules, there is no restriction on LLPs having corporate members or limited partnerships having general corporate partners. However, they must submit verification requirements for their partners/members). The Economic Crime and Corporate Transparency Bill is the second part of a legislative package. The aim is to prevent the misuse of UK corporate structures and minimize economic crime. Some parts of the bill will require secondary legislation and guidance. These are yet to take shape. Companies House must set up systems to minimize the time between the bill coming into force and its actual implementation.
If you are a director or owner of a UK-registered business, you must check whether you must fulfill the new identity verification requirements. Also, check if your registered office has everything in place to ensure compliance. Look for alternatives if your corporate structure has directors unable to satisfy the new requirements. Ringley Law acts as Company Secretary for countless entities in the Uk living sectors and is poised to assist Clients to transition and comply with these new requirements.
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