Sarah Alawi, Associate in our Legal team, and Lauren Barr, Head of Research in our Intelligence & Investigations team, look at the proposed reforms to Companies House through a privacy lens.
Companies House is set to see some of the biggest changes since it was established in 1844.
Following a series of consultations spanning from 2019-2022, and a resulting White Paper response, the Government has recently introduced the Economic Crime and Corporate Transparency Bill to Parliament, with the aim of making Companies House ‘fit for the future’.
A number of the changes to the way in which Companies House operates focus on helping individuals protect their privacy, especially if they’re taking on high-profile roles. Below, we summarise some of the key proposed reforms and look at how they could help you tighten your privacy protection measures.
What does Companies House do?
Companies House is an executive agency which holds the UK’s register of companies. The register currently holds information about 4.8 million companies and is accessed over 10 billion times a year.
The main role of Companies House is to incorporate and dissolve limited companies, register company information and, notably, make company information public. As such, the register acts as a searchable database of information on all (active and dissolved) companies in the UK.
One of the key purposes of the register is to promote transparency of companies and the people who run them, and therefore of the economy more broadly. But while the register helps inform many business and lending decisions, bad actors have found ways to abuse its flexible and open framework.
A bad actor could, for example, file false information about a company, or use other people’s personal details or address without their knowledge or consent in order to create a veneer of legitimacy, or to obscure its true ownership and control.
Towards a more reliable register?
At the heart of the upcoming reforms is the shift of Companies House from being a largely passive recipient of information to a more active gatekeeper over company creation and a custodian of more reliable data.
A number of the planned reforms – as well as aiming to tackle fraud – centre substantially on privacy. But how is this going to be achieved in practice, and what impact may it have on businesses and officers?
– Fraudulent appointments and abuse of registered addresses
Current problem: It is currently possible to register an appointment at Companies House without the knowledge or consent of the person being registered, and for companies to be registered at addresses without the knowledge of the resident or owner of that address. This loophole is ripe to be exploited by bad actors to obscure ownership or control of a company. This may be to enable tax evasion or fraud, or even to cover up criminal activity.
Proposed changes: Under the reforms, identity verification requirements will be introduced for company officers. In addition, the person being registered will be automatically notified of their appointment and given an opportunity to challenge it. Importantly, where register information is wrong, the Registrar will have new powers to query and, in some cases remove, that information.
– Identity theft or other harm
Current problem: Since 2015, information about the 7.5 million company directorships has been freely available online. Publicly available biographical information about company directors can be used as a starting point for building a profile on an individual, which could be used by bad actors to commit identify theft and pose risks to individual security and privacy.
The register currently makes the following information public: a director’s name, nationality, occupation, month and year of date of birth and correspondence address (different to ‘usual residential address’, which Companies House does not make publicly available).
It is currently not possible to supress a director’s signature, their day of date of birth contained in historic filings (before 10 October 2015) and/or residential address if used as a historic registered office address.
Proposed changes: In an attempt to protect company directors, reforms include removing the requirement to provide an occupation, and allowing directors to apply to have their occupation suppressed in historic filings.
Directors can also apply to have the day of their date of birth suppressed on the register where this information was filed before 10 October 2015, and request that their signatures, as well as their residential address (where used as a historic registered office address), are also removed. Where appropriate, the Registrar will have new powers to supress personal information which is not covered or contemplated by the proposals we have set out.
– Risk of harm
Current problem: As it stands, only PSCs (people with significant control) can apply to protect their name – or, in most serious cases, all required particulars – from appearing publicly if they are at serious risk because of the activities of a company/LLP they are involved with.
Proposed changes: This protection will no longer be limited to PSCs. Individuals that prove their publicly available information puts them at risk can also be protected.
Companies House reforms: Next steps
As the Bill is at an early stage, there is no set timeline for the reforms to come into effect. Uptake for making amends might be high when the reforms are implemented so it’s a good idea to act as soon as the opportunity is open.
In the meantime, it would be wise to check that your name and address are not registered against a company without your knowledge and consent, and that your correspondence address listed on the register is not your usual home address.
This can be a lengthy – and at times, complicated – process. It’s also worth keeping in mind that third party data aggregators scrape from Companies House, so even if information is removed from Companies House, it might still exist elsewhere online.
If you aren’t sure what information about you can be supressed, or you are worried that you do not know exactly where information about you lives, our Intelligence & Investigations team can help you by conducting a thorough audit of information about you on Companies House – as well as the wider online space – to protect your privacy.
Being aware of the full picture of your information online will allow you to correct inaccurate records, remove false information, and protect your privacy and security.