Companies House has proposed in its 2014/2015 business plan to establish a ‘register of integrity’ in an effort to tackle rogue directors.
Currently, Companies House has no investigatory power and therefore does not have a system in place to verify the identity or address of a would-be director. The intention behind this proposed register is to authenticate the identities of directors. This is under development following growing concern over how pop-up companies selling unregulated investments such as carbon credits can disappear and reappear in another guise. These companies might have no physical office and the directors themselves can go so far as to use fake names.
Further details as to how this register will work in practice are still to be confirmed but generally, it is thought that it will act as a ‘whitelist’ of directors who have proved they are who they say they are. This will, in turn, enhance the integrity of Companies House listings and would prevent people from taking advantage of the lack of identity and verification checks. It has also been proposed that Companies House will cross reference the data on the register with other data sources. For example, Companies House will engage with external enforcement bodies (such as the National Crime Agency and the National Fraud Intelligence Bureau) to identify the patterns and characteristics of fraudulent behaviour and will liaise with other government organisations to analyse and identify potential fraudulent behaviour to determine how this might be deployed in Companies House. Additionally, their plans include improved handling of director issues including overage, disqualified and bankrupt directors as well as piloting various technical options for the data cleansing of registered office addresses. The finer details of these plans are still to be confirmed.
Generally, the consensus is that this new register will improve the integrity and quality of the information on the Companies register. It remains to be seen how this will work in practice and whether it will impose additional administrative burdens on companies generally. All that aside, this measure as well as other recent proposals to tackle the harmful actions of rogue directors will reinforce confidence in the UK market place, protect the British economy and its reputation.
On August 26, 2014