Out-Law News | 20 Oct 2020 | 8:32 am | 3 min. read
The UK’s company registrar, Companies House, has said in its strategic plan that it wants to become a digital organisation focused on the use of data to inspire confidence and combat economic crime.
The strategic plan sets out six goals for the future, focusing on registers, services and people. Companies House said it wanted its registers and data to “inspire trust and confidence”, adding that it would maximise the value of its information to the UK economy and “combat economic crime through active use of analysis and intelligence”.
The registrar said it would strengthen the end to end process for obtaining, handling and checking data, and seek powers to deter false filing through upfront checks and the enforcement of penalties. It also planned to seek powers to make amending inaccurate information easier and to remove information in certain circumstances.
This goal follows a recent government announcement that directors’ identities will be verified before information is added to the register. Companies House said it was already testing and developing existing and new technological solutions to help deliver on this and other goals to improve information accuracy.
Companies House added that it would promote the use of its data to government and the public as well as using technology to analyse the data it held and use it to provide intelligence that could help prevent and tackle financial crime.
Civil fraud expert Andrew Herring of Pinsent Masons, the law firm behind Out-Law, said the proposals could help the UK crack down on fraudulent activity.
“For many years, Companies House has been a vulnerable gap in the UK’s counter-fraud armour, open to abuse. Regrettably, the same rules which enable the UK to be one of the easiest places in the world to start and do business also create opportunities for fraudsters,” Herring said.
“A sensible re-balancing of the regulatory regime for company incorporation and reporting has been long-overdue to protect customers, legitimate businesses and the Exchequer. It is heartening to see Companies House place combatting economic crime and identifying suspicious activity at the heart of its five-year strategy.”
Herring said the new information-checking powers recently proposed by the government would help with this aim.
“Greater investment in legislative and technology solutions to help Companies House contribute to the UK’s fight against economic crime cannot come soon enough,” Herring said.
Companies House said it would know if it was delivering on its plan to tackle crime through referrals to law enforcement agencies. Herring said there needed to have “credible deterrents and powers” in place in order to stop Companies House being seen as a weak link in this regard.
Corporate governance expert Tom Proverbs-Garbett of Pinsent Masons said the proposals were a “major” change to the status quo.
“The five-year plan acknowledges that there will be challenges in such wholescale adjustments to the way Companies House operates, particularly around ensuring that incorrect or fraudulent information is identified and removed from the register. Yet from a practical perspective, updating the systems used by Companies House so that it can reach its goal of becoming wholly digital is likely to be the more complex process – as it stands, some fees can still only be paid by cheque,” Proverbs-Garbett said.
“Companies House has identified its purpose – ‘driving confidence in the UK economy’ – and, to fulfil that purpose, anticipates receiving new legislative powers to cross-check information with other government agencies. This is intended to identify synergies but there is a careful balance to be maintained between transparency and protection of privacy, something that the five-year plan acknowledges without, at this stage, going further,” Proverbs-Garbett said.
Proverbs-Garbett said plans to use artificial intelligence and machine learning to facilitate information-sharing was a “significant leap” from the registrar’s current operations.
Companies House said it would reorganise itself around the three main services it provides: filing; company information; and intelligence and enforcement. The registrar said the new structure would enable it to scale and “flex” its operations more quickly, giving it increased agility and the ability to creatively respond to change.
Proverbs-Garbett said the structure could have both benefits and drawbacks for customers.
“Service-specific experts may be able to answer customer queries much more quickly and accurately, but is there the potential for gaps between those services (and experts) to emerge to a user's disadvantage?” Proverbs-Garbett said.
Companies House has also published its 2020/21 business plan, which sets out the initial steps to achieving the five-year strategy, including taking the first steps to eliminate paper output, transforming digital services, and improving data validation and verification.
21 Sep 2020