Directors should not be appointed until their identity can be verified in major proposals set out this month.
The measure forms part of a new crackdown on company fraud to give businesses confidence in who they are working with.
Announcing the plans, the Department for Business, Energy & Industrial Strategy (BEIS) said it will launch three new consultations to explore the impact of the reforms to Companies House, the UK’s official register of company information.
Under the proposals, directors would not be appointed until their identity can be verified and the register’s powers would be expended so that it can “query, investigate and remove false or inaccurate information”.
According to the regulator, “only companies whose boards comprise real people with verified identities will be allowed to act as corporate directors of other companies”.
It is believed that the new rules could help “close loopholes” that allow abuse of the register and support a crackdown on the “misuse of corporate structures by criminals”.
The BEIS also suggest that the plans could “reduce the administrative burden on businesses and boost the quality of data on the register” by making Companies House a fully digital service.
Commenting on the plans, Minister for Corporate Responsibility Lord Callanan said: “Today’s proposals set out further detail on our far-reaching reforms to ensure the Companies House register is fit for the 21st century – allowing us to crack down on fraud and money laundering, while providing businesses with greater confidence in their transactions.”
The three new consultations can be found here:
For help and advice on related matters, please get in touch with Maung Aye in our expert Corporate Team at Mackrell.Solicitors today.
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