October 2019

checking the accuracy of the register. If a
company files incorrect information at Companies
House, that is reflected in the entry on the
register.”
Of the proposals, the biggest relates to
identification and verification of Directors and
Persons of Significant Control (PSC) and of those
filing information on their behalf. Naish thinks
that the proposal to extend the powers of
Companies House to query and seek
corroboration of information before it is entered
on the register: “is good and should give people
looking at the information available greater
comfort that it can be substantiated.”
Veracity of information is important also to Swift
who offers a blunt view: “Anyone who wants to
benefit from limited liability as a company
Director should be required to prove they are who
they say they are, and all their corporate
affiliations and roles should be collected in one
place.”
One big problem is one that Piper points out –
while there should be a zero tolerance for
‘mistakes’, there is a huge volume of historic
data, much of which is perfectly accurate.
Further, there is also the resource issue at
Companies House itself to consider – even with
automation – in updating systems.
But to prevent breaches occurring, Naish wants
to see Companies House given sufficient powers
to maintain standards. He says that “if the new
proposals are really going to catch economic
criminals, Companies House is going to have to
be given the resources and manpower to catch
those corporate entities attempting to abuse the
system.” Like Piper he sees staffing and
resourcing issues and expects “that Companies
House will adopt some form of risk-based
enforcement.”
Effect on businesses
As to what effect the proposals will have on
Directors and businesses, Piper knows that there
will always be those who game the system.
However, he says that “the suite of measures in
“Anyone who wants to benefit from limited
liability as a company Director should be
required to prove they are who they say they are”
the consultation go a long way towards making it
much harder for the criminals without, in most
cases, imposing a significant burden on Directors,
business or their agents.”
Naish has a similar outlook. He reckons that “any
new requirements will quickly become the norm
just like the introduction of the confirmation
statement and PSC register.” In the meantime,
his advice to users of Companies House wanting
to check the accuracy of a filing – “contact the
company itself to corroborate the information.”
Windatt suggests the same, adding that if he
were making background checks on a company,
he’d look at other material available “and check
that the same names, postcodes, company
numbers etc. were consistent.” From his
standpoint, he would like Companies House to
use a unique Director ID number so that “a
Director with many fingers in many pies can more
easily be identified with a higher degree of
confidence along with a list of their many and
various interests.” As he puts it, directors have
the benefit of limited liability (in most cases),
their ready identification is a modest price to pay
for such protection.
To finish
But there is a balance to be struck for the biggest
challenge Companies House faces is not that it
needs to make the system better than it currently
is now, it also needs to make it more attractive
than the alternatives. If the proposals make
incorporation too difficult then legitimate
businesses as well as criminals will simply
bypass the company structure and use
unregulated platforms.
OCTOBER 2019 TC 21