Anyone in the UK has the right to set up a company. Many people who are self-employed operate as sole traders, but others will choose to set up a limited company or partnership through Companies House. Proposed amendments to the Companies Act 2006 aim to introduce stricter identity verification measures for any people who are involved with setting up, managing, or controlling companies to prevent money laundering by criminals, and to make sure that the people who are listed as directors of companies are who they say they are. There has been a growing problem of criminals registering companies using stolen identities and fake addresses, either to launder money or to apply for loans or credit which they are not entitled to.

ID Verification Process

The new rules will direct anyone who wants to be listed as a company director to one of their approved identity verification companies. Proving your identity will involve sharing details from key identity documents, such as the number and date of issue of a passport, or your driving licence number. Once the verification process has gone through, each individual will receive a unique identifier number which they can then use to complete the company registration process.

Before this new legislation was introduced, there were no identity verification requirements for people wishing to set up companies and list themselves as directors. The government felt that this was a loophole in the law which could lead to potential abuse through false registrations or fake identities. The new laws aim to improve the reliability of information available from Companies House, and to make it difficult to use fake identity details when setting up a new company.

Who Can Be a Company Director?

Limited companies must have at least one director, and many have more than one. The directors are the people who are legally listed as running the company and have to make sure that they follow the laws around running a business and submitting accounts. Anyone over the age of 16 can be listed as a company director, and don’t have to live in the UK. All companies operating in the UK require a British address, but this can be a service or correspondence address rather than a home address.

Directors can be listed on more than one company if they wish. If someone has been legally banned from running a company then they are not allowed to apply to become a director again until their period of disqualification has passed. People who are undischarged bankrupts are usually not allowed to be a director of a company until the disqualification has expired. Names of directors are public information and can be accessed through the Companies House website by anyone who wants to look.

Resigning as a director is easy too. If for whatever reason you want to step down as a company director, you put this in writing to the board or shareholders, and they will then inform Companies House which will remove your name from the register.