Starting April 8, 2025, new identity verification requirements will come into effect for company directors and individuals with significant control (PSC). This marks a significant shift in corporate governance and compliance, aiming to enhance transparency and prevent fraudulent activity in the corporate landscape.
What Are the New Requirements?
The upcoming regulations mandate that all company directors, PSCs, and those filing on behalf of a company must complete a formal identity verification process. This requirement applies to both new and existing directors, ensuring that all individuals in positions of control are properly identified and accountable.
Why Is Identity Verification Being Introduced?
The primary objectives of these changes include:
- Preventing fraud and financial crime – Reducing the risk of companies being used for illegal activities.
- Enhancing corporate transparency – Ensuring that company records accurately reflect the individuals controlling businesses.
- Strengthening public trust in business – Providing stakeholders with confidence that company leadership is legitimate and accountable.
How Will Identity Verification Work?
Identity verification will be conducted through a government-approved system, likely requiring individuals to provide official identification (such as passports or driving licenses) along with biometric verification where applicable. Companies House will oversee the process, ensuring compliance before allowing individuals to act as company directors or PSCs.
Who Will Be Affected?
The new requirements apply to:
- All new and existing company directors
- Individuals with significant control (anyone owning more than 25% of shares or voting rights in a company)
- Persons filing on behalf of a company, including company secretaries and agents
Consequences of Non-Compliance
Failure to comply with the identity verification process may result in significant consequences, including:
- Restrictions on company appointments
- Potential fines or legal action
- Invalidation of certain corporate filings
Steps to Take Now
With the deadline fast approaching, businesses should:
- Identify all individuals within their organization who must complete identity verification.
- Ensure that directors and PSCs have valid identification documents ready.
- Monitor updates from Companies House for guidance on the verification process.
- Consult with legal or compliance professionals to avoid disruptions.
The introduction of mandatory identity verification represents a pivotal change in the corporate regulatory landscape. Businesses must act now to ensure compliance and avoid potential penalties. By preparing in advance, companies can ensure a smooth transition and uphold the integrity of their corporate structure.
Photo by engin akyurt
