As ID verification becomes law, so far one in four directors have verified their identity out of the more than six million on the register.

There is a one year transition period for all directors to verify their identity on Companies House, but all new companies will have to go through the process as soon as they are incorporated.

Companies House confirmed that 1.5m directors had cleared the ID process adding they were ‘really pleased with the volume of people that have gone through the verification – more than we anticipated and more than we expected’.

From 18 November, it became mandatory for anyone acting as a director or person with significant control (PSCs) to verify their identity, subject to confirmation statement filling dates.

The rules are part of the wide-ranging Economic Crime and Corporate Transparency Act 2023 (ECCTA), designed to crack down on fraudulent use of the register at Companies House.

Paul Brehony, partner at Signature Litigation said: ‘Complex frauds are often perpetrated via complex corporate structures, typically comprised of numerous directorships held across multiple entities (and jurisdictions in more complex frauds). Sometimes, Companies House records do not reflect the underlying position of who owns what, and where, and who are the ultimate beneficial owners.

‘Given their inherent responsibilities, keeping Companies House records up-to-date and properly verified might be seen as a minor bureaucratic hurdle for many company directors. But the verification process is neither intuitive nor straightforward.

‘Inevitably, circumstances will arise where some directors face problems in trying to complete the verification process. Although authorised corporate service providers (ACSP) can assist professionally managed companies, some individuals who are not committed to their company director role: they may well not verify their ID as required and might instead choose to resign.’