Directors will be required to verify identities with Companies House before they are appointed to a business, people who ‘exercise significant ownership or control over a company’ and anyone filing information on a companies behalf will also now be obligated to confirm their identity. This is in order to hand the registrar more power to scrutinise and reject information.
The current Companies House approach of acceptance of information on good faith (Which has been the MO since the register started in 1844) has left the register vulnerable to exploitation by criminals, who have used it to set up companies with a view to launder money.
British registered companies have played a role in one of the biggest money-laundering cases ever seen, when approximately €200 billion was found to have been moved through the Estonian branch of Danske Bank, over an eight-year period, ending in 2015. This in turn led to calls to revamp and improve the British database and the associated rules.
Research by Global Witness, a campaign group, has also found shortcomings in the register.
Global Witness found more than 6,700 companies lats year that were controlled by owners who each controlled more than 100 other entities. They also uncovered businesses seemingly controlled by children under the age of two.
