LAW
Expertise – Jonathan Fletcher and Stephen McCaffrey from the corporate team at Tilly Bailey & Irvine Solicitors .
DON ’ T HAVE AN IDENTITY CRISIS
Law firm can help prevent new identity verification rules from impacting your business
For many years , business owners have been able to arrange their affairs to create a network of companies that own some or all the shares of other companies within a group or are appointed as directors of those companies .
This ability has had the effect of allowing the ultimate owners of companies to be difficult to identify and has led to accusations of owners hiding their interest in , and ownership of , the companies concerned .
While the vast majority of owners have no nefarious intent when organising their business interests , the government has taken steps to restrict this activity to allow easier identification of the people who actually own and control companies .
This is the purpose of the new rules introduced by the Economic Crime and Corporate Transparency Act 2023 ( ECCTA ) in relation to identity verification ( IDV ). Their purpose is to remove and prevent the registration of any new , fictitious directors and persons with significant control ( PSC ) at Companies House .
When in force , the application of the new rules will be retrospective and will apply to existing directors and PSCs already registered at Companies House . The scale of the task to implement this change is enormous , as it is estimated that seven million people will be subject to IDV .
The IDV process To complete the IDV process , a director or PSC will need to apply directly via Companies House or attend a meeting with an authorised corporate service provider ( ACSP ), which , as a provider of corporate law services , Tilly Bailey & Irvine will be .
Regardless of the route taken , an applicant will be required to provide a valid email address , current residential address and other supporting identification evidence as required . Typically , this will be valid photographic ID , such as a biometric passport or UK driving licence .
Once the IDV process has been completed to the satisfaction of Companies House , it will issue the applicant with a unique identifier . The unique identifier can be used in all future applications to Companies House to be registered as a director or PSC to confirm that the IDV process was completed previously .
How Tilly Bailey & Irvine can help
The ‘ one layer ’ rule Of perhaps greater concern to company owners and company secretaries responsible for group structures is that the new IDV regime will bring a change to the rule allowing directorships to be held by a corporate body . A UK company will need to appoint actual flesh-and-blood directors . Where a UK company has a corporate director named , the corporate director cannot itself have a corporate director .
While not in force yet , these new rules are coming and it is important to assess now whether your own company structure will fall foul of the impending one-layer rule , because Companies House will have the power to deregister any company it finds not complying with the new rules brought in by the ECCTA .
At Tilly Bailey & Irvine Solicitors , we understand how important your company is and how changes to company law can cause unease . The firm ’ s corporate team is ready , willing and able to guide you through all the changes introduced by the ECCTA ( whether the changes have already been introduced or will come later in 2025 ), and how these may impact your company .
* Why not book your company in for an " MOT " with Tilly Bailey & Irvine ’ s corporate law experts to make sure your company or group is fully compliant in the eyes of Companies House ? Visit tbilaw . co . uk
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