July 10, 2024 Companies House Publishes update on Identity Verification under the ECCTA 2023
One of the key changes to be introduced under The Economic Crime and Corporate Transparency Act 2023 (ECCTA) is the introduction of identity verification for directors (and equivalents for other entities) and persons with significant control (PSC).
The last substantial update was contained in the Bill passed in Oct 2023; we previously wrote about the key changes at the time. Further details on how an individual will be able to verify their identity have now been published in recent weeks.
Information and evidence required by Companies House
Companies House has published draft rules that set out the contact information, personal information, and types of evidence an individual must provide when applying to verify their identity. In summary:
- An applicant must provide a ‘valid email address’ (where emails sent by the registrar would be expected to come to the attention of the applicant) and their current residential address.
- Applicants must provide either one or two pieces of evidence from approved lists of documents. Generally, where biometric information (e.g. a passport with a biometric chip) or a UK-issued document containing a photograph (e.g. a UK photocard driving license) is provided then only one piece of evidence is required.
- Applicants who reside outside of the UK (including UK citizens) must provide government-issued evidence as their primary evidence.
Individuals can verify their identity via Companies House directly or through an ‘Authorised Corporate Service Provider’ (ACSP) that is registered with Companies House. Elemental will act as an ACSP and will be supporting new and existing clients and partner firms with the verification and filing requirements once the rules come into effect.
If verifying through Companies House there are three routes available: (a) the gov.uk ID Check app, (b) the One Login web journey or (c) a Post Office. If an individual is unable to provide the evidence requested, then they will be required to supply two pieces of evidence using a ‘registrar-approved third party supported by an identity checking interview’. The requirement to use a third party supported by an identity-checking interview will not apply where verification is carried out by an ACSP.
Draft ID verification regulations
Draft regulations that set out the procedure for ID verification have also been published. The rules set out the process for an individual to verify and re-verify their identity with Companies House and with an ACSP.
As a summary of important points:
- The regulations state that the registrar must determine an application for verification or re-verification ‘as soon as reasonably practicable’. If the registrar determines the application in favour of the applicant, then a notice must be given. Alternatively, if it’s considered necessary for the applicant to take additional steps then it must give notice specifying those required additional steps.
- Where an ACSP verifies or re-verifies an individual’s identity then it may deliver to the registrar a verification or re-verification statement (as applicable). This must include information such as the individual’s name, the date on which the ACSP became satisfied that the required personal information is true, and a description of the information and evidence that formed the basis of their satisfaction.
- An individual will be required to re-verify their identity if the registrar has reasonable cause to believe that information or evidence provided to it or an ACSP was ‘misleading, false or deceptive in a material particular’. If an individual is not reverified within 42 days of the re-verification notice then they will cease to be a verified individual (this period may be extended).
- An ACSP must hold records in connection with the verification and re-verification of identities (including where an ACSP was unable to verify an individual’s identity) for seven years.
- The registrar will allocate one unique identifier to any individual whose identity is verified. ACSPs will also be issued one unique identifier.
The draft regulations will be introduced when the ECCTA provisions concerning ID Verification and ACSPs come into effect. A progress report recently published by the Department for Business and Trade suggests that ACSPs will be able to register this winter, whilst ID verification will commence during the first half of 2025.
