ID Verification for Company Directors

Whilst the mainstay of our work here at John Gaunt & Partners Licensing Solicitors is the Licensing Act 2003 and attendant regimes, we like to keep an eye on any legislation that could have potential impacts on our clients and the wider hospitality sector.

One such piece of legislation is The Economic Crime and Corporate Transparency Bill 2022 (“the Bill”), which is making its way through the legislative process at the present time

If approved in its current format, the Bill will require all new and existing company directors, persons with significant control, and persons filing documents on behalf of companies to have their identities verified with Companies House.

Companies already registered with Companies House (approx. 5 million at last count) will benefit from a transitional period for existing directors, persons with significant control etc. to comply with the new requirements.

There will also be a regime of civil and criminal penalties for directors, persons with significant control etc. in relation to any failures to comply with the new requirements once the grace period passes.

It is proposed that there will be two ways to achieve identity verification:

1. Direct verification via Companies House where an individual is linked to an identity document e.g. a passport. There are no details as yet on what form the identity verification undertaken by Companies House will take; or
2. Indirect verification via an Authorised Corporate Service Provider (“ACSP”) who is registered as such at Companies House. An ACSP must be regulated by a supervisory body for anti-money laundering purposes and have an obligation to carry out customer due diligence on all clients in order to provide such services.

We will keep an eye on this draft item of legislation and provide further updates as matters progress.