Businesses will be better protected from fraud under new Companies House reforms initiated by the Government that will “do more” to safeguard the personal data of owners and ensure the ongoing accuracy of the register itself.
Business Minister Kelly Tolhurst has unveiled a substantial package of reforms with the clear aim of minimising the burden on law abiding companies. The reforms will contribute towards the UK’s efforts to tackle economic crime by increasing the traceability of company ownership and management, while also offering owners and businesses greater protection from fraud.
The proposed reforms will assist when it comes to increasing the accuracy and usefulness of the information available on the companies register, which last year alone was accessed no fewer than 6.5 billion times and, as of March 2018, included the details of over four million limited companies.
In the last three years there have been almost 10,000 complaints to Companies House from people concerned about their personal details, with worries including the potential for fraud and the illegal use of such information topping the list.
Going forward, better information sharing by Companies House, other Government bodies and financial institutions will more adequately protect businesses and ensure the faster and more sophisticated identification of possible criminal activity, in turn benefiting businesses and consumers alike.
Sometimes, the register can be misused to identify personal information, which may then be used for criminal purposes. Under the new proposals, directors will be given additional rights over their information (such as personal home addresses), while ensuring this information is still available in a transparent manner to public authorities where and when appropriate.
Importantly, the UK has one of the highest ratings for cracking down on anonymous companies, with the Government’s latest proposed measures designed to build on Britain’s world-leading and wide-ranging anti-corruption activity.
Speaking about the Government’s move, Edwin Morgan (interim director general at the Institute of Directors) said: “We welcome the thrust of these proposals. The IoD receives regular complaints from its members concerning the misuse of data published by Companies House. Transparency is a key feature of UK-registered companies, but if that transparency can be exploited by criminals or fraudsters then trust in the legal framework of business is undermined. We look forward to working with Companies House on new powers to monitor and control company information on its register. This will help to provide a more secure and reliable repository of corporate data.”
If brought forward, this new package of proposals from Westminster would represent the most sweeping changes to the Companies House system of setting up and operating companies since the register was first created way back in 1844.
Reliable company information is critical to the financial and banking sector in meeting know-your-customer requirements and helping to protect customers from fraud. That being so, the new proposals are smart, timely and very much to be welcomed.