12/12/2023 Gatenox

Identity Verification: Strengthening UK Company Integrity under The Economic Crime and Corporate Transparency Act

The UK’s introduction of The Economic Crime and Corporate Transparency Act brings a significant regulatory change, particularly in identity verification, aimed at combating corporate fraud and enhancing economic security. This article delves into these pivotal changes, highlighting their importance for both individuals and entities within the corporate sector.

Introduction of a New Identity Verification Process

Companies House is set to implement a new identity verification process, a pivotal measure to deter the misuse of companies for illicit activities. This process requires individuals involved in setting up, managing, owning, or controlling UK companies to authenticate their identities, ensuring they are who they claim to be​​.

Comprehensive Application of Identity Verification

The scope of this verification extends to all directors and people with significant control (PSCs) in new companies. It also applies to members of limited liability partnerships (LLPs) and similar entities. Significantly, existing companies will undergo a transition period, allowing their directors and PSCs to comply with the new requirements. Furthermore, any individual acting on a company’s behalf must verify their identity before filing information with Companies House​​.

Methods of Identity Verification

To facilitate this process, Companies House will provide a service for identity verification using official ID documents, such as passports. This service is designed to be accessible, with a range of support options to assist individuals through the process​​.

Role of Authorised Agents in Verification

Authorised Corporate Service Providers (ACSPs), including company formation agents, solicitors, and accountants, will play a critical role. These agents, already responsible for due diligence checks under anti-money laundering protocols, will incorporate the Companies House identity verification requirements into their existing processes. The verification checks performed by these agents must align with the assurance level of direct verification with Companies House​​.

Implications for Businesses and the Economy

These changes underscore the UK government’s commitment to enhancing corporate transparency and integrity. By mandating rigorous identity verification, the UK aims to create a more secure and trustworthy business environment. This initiative is expected to significantly reduce the risk of fraud and misuse of corporate entities, thereby bolstering confidence in the UK’s economic landscape.

The new identity verification process represents a paradigm shift in the UK’s approach to corporate regulation. It not only fortifies defenses against economic crime but also paves the way for a more reliable and transparent corporate sector. These changes are a testament to the UK’s dedication to upholding the highest standards of corporate conduct and integrity.

Gatenox offers advanced solutions tailored to these new requirements. Our products facilitate seamless identity verification, aligning with both direct and indirect verification methods mandated by the Act. By integrating Gatenox’s technology, businesses can ensure compliance with the new standards, maintain operational efficiency, and uphold the integrity of their corporate information.

This development underlines the UK’s commitment to a secure and transparent business environment, and Gatenox stands ready to support entities in navigating these essential changes.