Our new powers under the Economic Crime and Corporate Transparency Act 2023 are already making a real-world impact.
As part of our ongoing efforts to prevent financial crime and expose organised criminals who engage in fraud, we have targeted an emerging area of concern: the exploitation of businesses through the cloning of legitimate companies.
Investigating cloned restaurant companies
Between December 2023 and February 2024, our intelligence and enforcement teams identified 786 companies that had been incorporated and were suspected to be fraudulent clones of established restaurant businesses.
By looking to exploit the reputation of well-known hospitality brands, organised crime groups were trying to make their illegal activities look legitimate and trustworthy.
These cloned companies often used names that closely resembled existing brands, often only differentiating themselves by a single character or punctuation mark.
Their intention is typically to:
- deceive suppliers and financial institutions
- open business bank accounts under false pretences
- commit fraud by placing large orders or seeking investment under a fraudulent identity
Well-known restaurant groups and public figures within the hospitality sector were among those targeted, which resulted in widespread media coverage.
Companies House took immediate action to investigate this activity, and we were soon able to flag companies for enforcement action.
As a result, 2,895 fraudulent appointments and 965 companies were removed from the register. We also then changed the names of 929 of the associated companies, an important action that protected the businesses and individuals whose company or personal names were misappropriated in these cases.
How our new powers are helping
The Economic Crime and Corporate Transparency Act has given Companies House important new powers to respond to such threats:
- We now apply greater scrutiny through querying and rejecting company names that we believe could mislead or suggest an inauthentic connection with an established business.
- We can intervene when a company is found to be using a name for fraudulent purposes or one that misleads the public. We direct such companies to change their name, and if the company fails to comply, we enforce a change.
- We’ve improved intelligence and enforcement capabilities, supporting faster collaboration with law enforcement and other regulatory partners, which enables us to intervene as early as possible.
- Upcoming identity verification requirements for all directors and people with significant control (PSCs) will also reduce the risk of fraudsters hiding behind false identities.
Increasing transparency and trust in UK business
These cases highlight the importance of the role Companies House plays to preserve the integrity of the register. Cloned companies pose a threat to both legitimate businesses and the public. Suppliers and investors who rely on accurate company information are also at risk if we do not stop this criminal activity.
We're committed to using our new powers effectively to challenge this misuse of the register and disrupt criminal activity.
Together, we're strengthening the UK’s company register and helping to build a more transparent and trustworthy business environment.
If you're a business owner and suspect your company may have been cloned, or if you’ve identified a suspicious name on the register, please report it to us directly.
1 comment
Comment by MRS Heather Butcher.. posted on
Criminals in these challanging times think they are ahead. Studying crime law and working with the local police alongside safegaurding teams??, have kept not only myself safer but our communities preventing sophesticated crimes online. I never know who is genuine these days not falling for the bate....protecting what is really worth protecting with the banks.....writer in UK