The reforms aim to increase the accuracy and usefulness of the information available on the companies register, which last year was accessed 6.5 billion times and, as of March 2018, included over 4 million limited companies.
This will provide increased traceability of company ownership and management, while offering business owners and businesses greater protection from fraud.
In the last three years there have been almost 10,000 complaints to Companies House from people concerned about their personal details, with worries including fraud and use of personal details topping the list.
The package of proposed reforms include:
- Knowing who is setting up, managing and controlling companies: Those who have a key role in companies will have their identity verified;
- Improving the accuracy and usability of data on the register: Companies House will now be able to query and corroborate information before it is entered on the register. This will also mean it is easier and quicker to remove inaccurate information from the register;
- Protecting personal information on the register: In a minority of cases the register can be misused to identify personal information, which can then be used for criminal purposes. Under these proposals Directors will be given additional rights over their information, for example personal home addresses, while ensuring this information is still available in a transparent manner to public authorities where appropriate;
- Improving the detection of possible criminal behaviour: Better information sharing by Companies House, other Government bodies and financial institutions will better protect businesses and ensure faster and more sophisticated identification of possible criminal activity – benefitting businesses and consumers.
A welcomed step forward
Martin Brooks, Company Secretarial Manager at Rouse Partners commented.
“The proposed reforms are of course a welcomed and necessary step forward in protecting business owners against the misuse of their Companies House data.”
“They build on previous changes which aimed to bring increased accountability and transparency through the register of People of Significant Control introduced in 2016, as well as new protections against identity fraud which gave directors the ability to remove their personal addresses from the company register. We also saw draft laws last summer for a world-first public register which will require overseas companies that own or buy property in the UK to provide details of their ultimate owners.”
“They will also be underpinned by a major digital services upgrade at Companies House, which is likely to make this overall, the largest change to the system of setting up and operating companies since the register was created in 1844.”
Is increased compliance the cost of improved data protection?
Martin Brooks added, “It remains to be seen whether these reforms will lead to increased compliance requirements for companies or additional red-tape that will slow down company formation.”
“We will assess whether there are additional client filing needs when further detail and timings for the implementation of these changes are announced.”