Companies House targets director for hire scams

Jacob Grattage, Reporter, Business & Accountancy Daily. Croner.

Warning for directors as social media posts, text messages and emails used to con them into becoming directors of random companies.

Companies House is warning directors to be aware of a spate of scammers offering money to individuals to become a company director.

Guidance warns directors that people are being approached and offered money in exchange for their identity details and appointment as a director of a random company.

‘They may use your identity to hide who is actually running the company and let you take the blame for criminal activity. They may pressure you to sign documents immediately or ask you to pass money through your bank account,’ the guidance warned.

Offers are advertised on social media platforms, or recruiters may send offers directly over WhatsApp or email from an unknown contact.

The warning stated: ‘If you have been formally appointed by a company and accepted the role of director, you are legally responsible for running the company’.

Directors can be held liable for offences including money laundering, tax evasion and fraudulent trading, become responsible for company debts if the business enters insolvency, be disqualified from acting as a director for up to 15 years, and face fines or legal action that could affect their ability to obtain credit or loans.

For anyone who has already agreed to become a director under such an arrangement, Companies House advises resigning from the position as soon as possible.

This may require filing a termination of appointment form (TM01). Individuals are also encouraged to contact Companies House for support, keep records of any attempts to step down, and seek independent legal advice.

The crackdown comes as the government continues a wider push against economic crime.

Recent reforms have given Companies House new powers to tackle fraud and money laundering, including the removal of 151,000 suspicious or misleading addresses from the company register since March 2024.

Most recently in July, a multi-agency crackdown resulted in 11,500 companies being struck off the Companies House register, with authorities targeting company formation agents and corporate structures suspected of enabling money laundering and other criminal activity.

Companies House stressed ‘do not give your personal details or sign anything. Report the scam to Report Fraud online or by calling 0300 123 2040.’