When Bob Dylan wrote The Times They Are A-Changin' in 1964, the social and cultural change the world was facing must have seemed extraordinary.
Although company law is not quite as cool as Bob Dylan (or maybe it is), the changes in the environment Companies House is operating in are equally unprecedented. In the past, the focus has been strongly weighted towards transparency and ease of doing business. The company law framework was developed to support these primary goals.
Transparency and ease of doing business remain the foundation of the services we provide to our customers. It means the UK regulatory framework is highly regarded across the world. But there are other equally important issues we need to take into account, like the:
- accuracy of information held at Companies House
- abuse of personal information on the register
- misuse of UK registered entities as vehicles for economic and other crime
Together with Companies House, The Department for Business, Energy and Industrial Strategy (BEIS) has responded to these issues by publishing a wide-ranging consultation on corporate transparency and register reform. It includes proposals which represent the most important changes to company law since the register was created in 1844.
The consultation covers areas where there's a growing demand for us to operate in a different way. We work very closely with law enforcement agencies already and have actively sought to increase awareness on how the information on our register can assist them.
We already do what we can. Everyone in Companies House is committed to maintaining the integrity of the register and we have around 80 people with specific responsibilities in this area. Even so, I'm still sometimes unable to take action where it would seem to be common sense for me to do so - and that inevitably attracts criticism of Companies House. We've all seen some of the press coverage.
Respond to the corporate transparency and register reform consultation by 5 August 2019.
Through this consultation, you have the opportunity to give your views on many of the issues identified by our customers and stakeholders. We really would welcome your views on the 4 main areas covered.
1. Knowing more about who's setting up, managing and controlling companies
At the moment, we accept information to the register without checking that people are who they say they are.
In the vast majority of cases, this does not cause any problems. But there are instances where criminals claim to be directors of UK companies and file false information on the register. This can cause great distress to people and potentially provide a cover for illegal activity.
To address this, we're proposing to introduce verification of:
- directors
- people with significant control (PSCs)
- presenters
There's also the question of whether we should do the same for shareholders.
If we're able to verify the identity of the people we interact with, there will be significant benefits to the accuracy of the information on the register. This will drive up trust and put off those who want to use UK companies for criminal purposes.
2. Improving the accuracy and usability of data on the register
As I've said, we accept the information that people give us and generally we're pretty confident that the register is accurate. But there are times when people file information that is wrong or we think might be wrong.
Currently we do not have the power to query, amend or remove information - apart from in very specific circumstances.
The consultation proposes that there's a case to extend my powers. This could lead to a real benefit to the accuracy of the data on the register, and trust and confidence will grow.
3. Protecting your personal information on the register
There are over 4 million companies on our register. The ease of access to the data we publish provides a fantastic resource and drives confidence in the UK economy. It's the bedrock of financial and business decisions worth trillions of pounds.
The information on our register is searched more than 5 billion times each year, which is evidence of the value of transparent data. But people are rightly concerned about identity theft and fraud. It's right that we consider how we protect their information to safeguard them from risk.
The consultation explores whether some information we collect should not be available to the public, and only shared with public authorities such as the police under strict control. This could include information like personal addresses and email addresses.
4. Improving the detection of possible criminal behaviour
The vast majority of the 4 million companies on our register are law abiding. But there's evidence that a small but growing number of companies are being used to hide or launder dirty money.
We're proposing to cross reference our data sets with other public and private sector bodies, and take a risk based approach to intelligence sharing. By introducing a requirement for feedback loops, other bodies will help to identify discrepancies in the information we publish.
This will significantly help us to identify suspicious behaviour on the register, and to take steps to stop companies being used for illicit activity.
Our transformation
If the reforms proposed in the consultation are adopted, Companies House will be a very different organisation with a different focus. We'll need to transform.
Digital transformation is obviously vital. We'll need modern, intuitive systems to make sure it's as easy as possible for our customers to interact with us. I'm particularly keen to get identity verification right so that we minimise any additional burdens.
But it's not just about digital transformation. Of equal importance will be the resource implications, the new skills we'll need and the cultural changes we'll need to make. We've already begun a transformation programme which, alongside register reform, will position us to play a key role in driving confidence in the UK economy.
The times really are a-changin'.
29 comments
Comment by Ronnie Barker posted on
Good news that times really are a-changin' at the Companies Registry.
Comment by Mr M G Dalzell posted on
Interesting and worthwhile. Why not tie all this up with the banking industry who already carry out quite detailed checks on Directors etc
Comment by Liz Worth posted on
How wrong was I? I thought that's what Companies House was all about anyway. Good to know they will have more power to stop the minority that try to use it as a tool to break the law, operate illegally and con genuine business people.
Comment by Elizabeth Gibson posted on
What a shame that the information currently available from Companies House is becoming more and more bland and less and less informative, and is very often inaccurate.
More forms = less information.
Why bother qualifying as a Company Secretary and learning the law behind the disclosures? It would appear that anybody who can click a mouse and has access to web-filing codes can enter any old rubbish on the Register.
Comment by Igor luchian posted on
Thank YOU
Comment by David Shephard posted on
High time that one of the foremost Data Bases on business in the UK is brought up to speed to protect the many from the few. Fully supportive of the Chief Executive of Companies House seeking more powers to prevent abuse of personal information and the misuse of UK Registered entities.
Comment by Keith Bedingham posted on
I agree 100% with David's comment
Comment by Pauline posted on
Why is the month and year of my birth returned on a general google search using my name as a director?
Is this classed as necessary data under GDPR?
Comment by Jonathan Moyle posted on
Hi Pauline - thanks for getting in touch.
Under section 163 of the Companies Act 2006, a director must register their date of birth (plus other details) when they're appointed. The company must then send this information to Companies House under section 167.
We have a duty to register this information and make it available to the public. For directors appointed after 10 October 2015, only the month and year from their date of birth will be publicly available.
The GDPR allows an exemption under Schedule 2, Part 1 (5) of the Data Protection Act 2018. This exemption applies to Companies House because we must make information about registered companies available to the public under the Companies Act 2006.
Here's more guidance on what information is available to the public: https://www.gov.uk/guidance/your-personal-information-on-the-public-record-at-companies-house
Comment by Jack posted on
I totally share Pauline's concern. I also understand the current legal requirement to obtain dates of birth. But I cannot see that any purpose is served by publishing the month of the year. Also, I understand that the register containing details of persons with significant control - not the one kept at Companies House - must show the whole dates of birth of the relevant persons: day, month, year. That cannot be sensible. Perhaps these issues could be addressed when the changes are being contemplated.
Comment by Professor Hassan Aly posted on
I fully agree with Pauline neither the age nor date of birth nor the email address nor the address of any limited company director should be disclosed by Companies House. These are very personal confidential data that should never be displayed or shared without the consent of the director. This is a typical government or authority using its power to breach the personal privacy and display confidential personal data to everyone without any consent. Companies House should be protecting the privacy of confidential personal data and not displaying it without any prior consent.
In heath and medical care & pharmaceutical industry, the display of any patient personal data is forbidden and patient are identified using numbers not even initials in all clinical studies to protect their privacy. Displaying any single personal patient data is a criminal offence that could lead to prison and a severe financial penalty of millions for any pharmaceutical company. As a director of limited company, I already display my full name in my company paper heading in all correspondence but I do object to disclosing my private data of DOB, age, address, email address, etc without my prior consent.
Comment by Ian posted on
Whilst you can legally do it, it doesn't mean that it's acceptable!
I can't think of any reason why my date of birth would be needed by searchers of the register. Age would be better, although I'm unclear why anyone would need it unless they want to fraudelently clone my identity.
In a similar vein, why is my signature on the LLP accounts we submit not redacted before being made publicly available? Again all too easy for someone to attempt to fraudently clone my identity
Comment by Esme Turner posted on
The proposals address concerns about the publication of personal data such as dates of birth and signatures. If you haven't already, please fill in the consultation to make sure your views are considered: https://www.gov.uk/government/consultations/corporate-transparency-and-register-reform
Comment by Gary Hardman posted on
I think it would be wise to flag up whether a director or company have been linked to criminal activity. Companies need to protect their assets from fraudsters and, for the law bidding majority, this would be a massive tool. Only the criminal minority would object.
We have the rights to know to whom we extend credit to. Please give us the power to make a truly informed decision about who we chose to do business with.
Comment by GM posted on
Would it be possible to add details of any disqualification (under the Company Directors Disqualification Act 1986) to the 'people' tab for a particular director/secretary of a company/LLP? Disqualification is a matter of public record. I appreciate that Companies House keeps a separate disqualifications register but it would be more helpful when searching a company's details to have all relevant information about its officers also in the same place. It might also be helpful to include a link on the 'people' web page to the individual bankruptcy and insolvency register held by the Insolvency Service so that a person searching the company can also quickly and easily link to that register.
Comment by RonH posted on
One suggestion: Validate all addresses i.e. check (against a postcode database) that they exist and are not ambiguous, and that the postcode matches the address. This should not be too difficult!
Comment by E M Grabinska posted on
I have had an instance where a person completely unknown to me (or anyone in my family), albeit coincidentally sharing the same two given names as myself, was able to set up a limited company from Poland via the internet using my 90+ year-old mother's address. When I contacted Companies House about this potential address squatting I was told that there was nothing they could do. Is this type of issue also going to be addressed?
Comment by Esme Turner posted on
The consultation asks whether we should have powers to more easily remove inaccurate information. Please fill in the online consultation so that your views can be considered: https://www.gov.uk/government/consultations/corporate-transparency-and-register-reform
Comment by E M Grabinska posted on
Thank you. I have sent an email to the address given in the link you kindly supplied.
Comment by George posted on
Can you look at PSCs for micro non-profit companies. We have one to manage the common ground attached to an estate of three houses and it covers things like lighting, sewers, gardening etc. Three houses means 3 Directors with 33% control each. Therefore they are PSCs. It seems utterly pointless to have to submit a form each year for £12 to say that there has been no change (because none of the houses have been sold - there is one Director per house). Further PSCs bureaucracy would be very unwelcome. In this case it is a very large sledgehammer to crack a very small nut.
Comment by Roy Revelt posted on
I think publicly stating director's physical address is the biggest nuisance. It does not give any reassurance whatsoever to shareholders. On the opposite, it's just phishing risk. Personally, throughout directorship, I received handful of dodgy credit card company offers and couple phishing/impostor attacks targeting my banking account via telephone banking. Had to get new cards issued, twice. It's not the challenges that Companies House originally anticipated back in 18th century and I congratulate all our modern Companies House efforts.
Comment by Peter Edward Doyle posted on
As a retired accountant I would like to endorse these suggested changes in their entity allowing the Chief Registrar to implement them on behalf of honest people.
Comment by John Harvey posted on
Might I suggest that CH requires personal applicants to follow the practices of HMLR?
Comment by Robert Frost posted on
You need to ensure directors & shareholders only enjoy limited liability, if they actually produce final accounts after insolvency. If this means depositing a cash sum with Companies House in advance to cover the cost of doing so, then so be it. Too many people escape prosecution for ACTS OF INSOLVENCY by running way with the cash and never having to produce an account of what happened to the cash. THIS IS THE NUMBER ONE MOST IMPORTANT THING TO CHANGE.
Comment by Mr Mitchell posted on
Hello
What will happen to roles filled by nominee directors and shareholders? Some people use them for various reasons and honest reasons at that :
i) not wanting people in general to know their wealth (not all rich people brag about their wealth)
ii) because their company is dormant
Criminals thrive on some of the information held on public registers. If you make it too difficult, small companies will transform into sole traders and declare their annual income straight to the tax man (he is 100% confidential, with no public register accessing his details) all in my humble opinion.
I have 1 company in my name and all is declared in full as required, just for the record.
Comment by Mr Mitchell posted on
What would be great is if Companies House 100% fetched the company accounts from HMRC directly and using the same accounting periods.
Therefore companies would only have to file one set of accounts with the HMRC accordingly.
Mirror the records via the tax man.
Comment by Barry Fitzgerald posted on
An excellent set of proposals - I hope they are enacted as soon as possible.
Comment by Anne Gow posted on
Will the reforms enable minority shareholders and trust beneficiaries to deal with legitimate directors of small private companies who:
1. Refuse to hold AGMs (size of company permits them not to)
2. Have to be endlessly chased to provide company accounts
3. Fail to act to replace 80+ year old trustees who have been desperate to retire for 20+ years
4. Have not paid a dividend for over 20 years
5. Pay themselves handsome salaries, pensions and benefits
6. Receive £60K of taxpayers money into the company in the form of EU farming subsidies but then generally make around £10K of profit a year - despite controlling assets worth around £10 million
7. File Companies House returns late about 80% of the time
8. Refuse to meet with any of the minority shareholders who raise questions about the poor performance of the company
I have been advised by a reputable solicitor that £100K would be insufficient to tackle some of the above.
Comment by Jonathan Moyle posted on
Thank you for all your comments.
It's really important that your views are heard and considered - please fill in the online survey:
https://www.gov.uk/government/consultations/corporate-transparency-and-register-reform
It's open to everyone and only takes a few minutes to complete.