The business environment of the UK has entered a significant transition due to the new Economic Crime and Corporate Transparency Act (ECCTA). It is the first of many changes in the policy of Companies House after a long time.
The changes focus heavily on a new technology-based policy requiring identity verification of all persons who form and control a UK Limited Company (LTD).
The aim is to ensure that all companies in the UK are associated with real individuals to improve transparency and reduce the incidence of financial crime.
For founders, international business owners, who manage their companies from abroad, these changes are significant in terms of incorporation, banking, compliance, and legal protection on a continual basis.
This is an all-encompassing guide from Bizstartz to cover everything pertaining to the changes with a guide on verification and who is supposed to get it, the required documents as well as how Bizstartz supports entrepreneurs globally in the transition.
1. Why the UK Implemented Necessary ID Checks in the First Place
Up until this point, the UK has had the easiest and quickest company formation process, for which, on completion, there were no follow-ups. This process, while having several positive effects on the economy, has led to the following issues:
1.1 Increase in Fraudulent Registrations
Abuse of the UK company formation process has also led to:
- Criminal and shell companies
- Tax evaders
- Identity thieves
- False names
- Voluntary directors
- Misleading addresses
- Proxy persons
This has been a UK global reputation risk problem for years.
1.2 Increasing Concerns From Banks, Authorities, and International Organizations
Financial institutions and payment processors repeatedly raised concerns about:
- Fake ownership structures
- Hidden beneficial owners
- High-risk transactions
- Inability to confirm the identity of company controllers
International regulatory bodies such as the FATF (Financial Action Task Force) also urged the UK to tighten corporate verification rules to match global anti-money-laundering standards.
1.3 Enhancing Transparency & Trust in the UK Economy
Tying each position of power in a UK corporation to a verified individual strengthens:
- Trust in UK corporations
- Customer and investor safety
- International trade reliability
- Bank and fintech confidence
1.4 Modernising the Companies House System
Companies House is being turned from a passive registry to an active regulator. The identity verification is only one of the improvements and upgrades to the system. We are building capacity to:
- Detect fraud using automation
- Implement biometric verification
- Monitor for suspicious changes in filing
- Track changes in ownership
The combination of these improvements will help position the UK as one of the most transparent and trusted for doing business.
2. Who Must Complete Identity Verification? (Expanded)
Those that are managing, controlling, owning, or filing for a UK LTD will trigger the identity verification requirement for all. The following groups are obligated to complete verification:
2.1 Directors
Directors have to complete their identity verification before the company can incorporate legally. A director that has not verified their identity is not able to take office.
For companies that exist, every director must finish the verification process by the deadline given by Companies House. If a director does not verify in time, it may…
- Prevent the company from submitting any required documents.
- Stop the company from appointing or resigning any directors.
- Result in the company getting penalties.
2.2 Persons With Significant Control (PSC)
A PSC is someone who has:
- 25% or more of the company’s shares, or
- 25% or more of the company’s voting rights, or
- Authority to appoint or dismiss directors, or
- Substantial power or authority over the company.
All PSCs must verify their identity, including those who do not reside in the UK.
In circumstances where a company has overseas shareholders, silent investors, or corporate shareholders who, in turn, have individual stakeholders, every individual within that chain of control may need to be verified.
2.3 Shareholders (When Required)
Generally, small stakeholders (who have less than a 25% stake in the company) do not have to verify their identity.
However, identity verification is required if the individual:
- Becomes a PSC
- Obtains filing powers
- Exerts any of the specific powers of decision-making
For all founders, tracking ownership changes is important to help assess when such changes in verification requirements arise.
2.4 Company Secretaries & Officers
If a company secretary is a holder of filing powers or has administrative control, they too must complete ID verification.
2.5 Any Individuals Submitting Documents for the Company
This includes:
- Accountants
- Formation agents
- Filing agents
- Administrative personnel
- Internal staff members submitting confirmations or accounts
If an individual submits filings for several entities, they only need to complete verification once, however, to all actions that they perform, their name will be associated.
3. Consequences Of Not Verifying (Expanded Penalties And Outcomes)
Compliance is not voluntary, and Companies House has been granted greater powers to enforce compliance.
Here are the consequences expanded:
3.1 Financial Penalties And Charges
Companies House has the ability to impose:
- Financial Penalties to the individual who hasn’t verified
- Financial penalties on the corporation for allowing unverified persons to act.
- Daily financial penalties can be placed on the corporation so long as the corporation continues to be operationally Non-Compliant.
The penalties can stack.
3.2 If Filing If Not Verified
Companies House may refuse filings and unverified individuals must be required.
- Confirmation Statements
- Annual Accounts
- Change of Director or PSC
- Change of registered office
- Change of Share
- Change of Company name
This can greatly hinder the ability to conduct business.
3.3 Publicly Mark as “Unverified” Company
A business with unverified officers will likely be publicly noted as such in the Companies House register.
These signals indicate:
- Deter investment.
- Heightened bank scrutiny.
- Protracted delays.
- Erosion of reputation.
3.4 Potential Criminal Liability
You may incur criminal liability for:
- Willfully ignoring verification.
- Fraudulently completing documents.
- Non-compliance attempts.
3.5 Risk of Company Strike-Off:
When a company continues to fall short of verification standards, Companies House may:
- Classify the company as non-compliant.
- Restrict all business operations.
- Initiate mandatory company strike-off.
- Liquidate the business.
Though this represents the highest degree of risk, it can apply in instances of ongoing compliance deficiency.
4. When Should You Do Identity Verification? (Extended Timeline and Requirements)
The deadlines for identity verification will depend on whether you are setting up a new UK LTD or if you already have one.
4.1 New UK LTD Formations (Starts Right Away Once The System Is Released)
In the case of new incorporations:
- All directors have to verify their identities before incorporation is complete.
- PSCs must verify their identities shortly after incorporation.
- If verification is overdue or not completed, Companies House may block the formation or cancel it.
- Formation agents must adhere to new guidelines and cannot complete a formation if none of the individuals in the formation are verified.
4.2 For Existing UK LTD Companies (Rolling Out in 2025)
For existing companies,
- Companies House will be implementing a phased verification system.
- All directors, PSCs, and individuals filing on behalf of the company will be set a deadline to complete verification.
- Companies that do not comply with the deadlines will incur more severe penalties.
Companies House may offer other contact reminders in addition to the primary methods of:
- Government Gateway accounts
- Email notifications
- Companies House filings portal
It is critical for companies to keep their registered office address current to ensure that they will receive these notifications.
4.3. Early Verification Requirements for High Risk Companies.
Companies that have:
- Frequent changes of ownership
- Numerous foreign owners
- Nominee arrangements
- Complex structures of shareholdings
May have to comply with additional verification requirements sooner.
5. How Identity Verification Works (2–3× Expanded Process)
There are two official methods through which identity verification can be completed. This section has additional descriptions for each step.
Method 1: Direct Verification Through Companies House
Step 1 — Create a Companies House Account
Accounts must be manually created for each individual user.
Step 2 — Upload a Government-Approved ID
Here are some of the documents accepted by IDCheck:
- Passport (preferred)
- National ID Card,
- UK Driving Licence,
- Residence Permit
The system checks for:
- Document validity
- Expiry date
- Machine readable zone (MRZ)
- Security markings
Step 3 — Biometric & Facial Recognition Check
This includes:
- Selfie video
- Matching the submitted document
- Presence detection (to prevent spoofing)
Step 4 — Verification Decision
This can be:
- Instant result (fully automated)
- Review (may take 2 business days)
- Rejections (new documents must be submitted)
Step 5 — Linking ID to Roles & Companies
Once verified, your identity is connected to:
- All your directorships and PSCs
- All your submissions
Method 2: Verification Through an Authorised Agent
This is the Suggested Alternative for Founders Based Outside of the UK.
Authorised Agents have simplified the process for customers who are not residents of the United Kingdom.
Benefits Include:
- Recognition of foreign documents
- Expert manual assessment
- Quicker processing
- Support with resubmissions
- Increased success for documents not in English
- Comprehensive assistance
Steps Involved:
- Send agent your scanned documents
- Do a live selfie or video ID check
- Agent checks documents and certifies them as real
- Agent submits documents to Companies House
- A reference number for verification is generated
This method eliminates hold ups related to language issues, document issues, or overseas verification issues.
6. Documentation Required for International Entrepreneurs (Expanded Guide)
Entrepreneurs living outside of the UK do tend to have more cross-border additional verification requirements, and so here is an expanded breakdown.
6.1 Primary Identity Documents
Must be authentic and issued by a government.
- Passport (best umbrella document)
- National ID with a photo
- Residency or citizenship document
6.2 Secondary Proof of Address (If Required)
These documents should be recent (within 90 days):
- Any Utility Bill
- A Bank Statement
- Internet or telephone Bill
- Letter from a government that assesses tax
- Any document from the government
Documents requiring a translation must be certified.
6.3 Biometric Requirements
- Live video capture.
- Facial recognition match.
- Liveness verification.
- Profile photo consistency.
6.4 Special Requirements for Certain Countries
Some high-risk jurisdictions require:
- Notarized documents.
- Embassy attestation.
- Additional verification checks.
Using an Authorised Agent is highly recommended for entrepreneurs in such regions.
7. Impact on Banking, Payment Gateways & Financial Compliance (Expanded)
Identity verification is now fully embedded in the UK’s financial architecture.
7.1 Faster Banking Approvals
Banks such as:
- HSBC
- Barclays
- NatWest
- Lloyds
And fintechs such as:
- Wise
- Revolut Business
- Payoneer
- Tide
are increasingly dependent on Companies House verification to authenticate ownership.
Onboarded verified companies will enjoy seamless on-boarding.
7.2 Reduced Risk of Account Freezing
Unverified companies can be classified as higher risk. This results in:
- Delayed transfers.
- Additional due diligence.
- Account freezes.
- Re-submission of KYC documents.
Verification dramatically lowers these risks.
7.3 Payment Gateways Now Require Verified Ownership
Platforms like:
- Stripe
- PayPal
- Shopify Payments
- Square
Validate Companies House data for:
- Company ownership.
- Director identity.
- Legal status.
Non-verified companies may experience delays or outright rejection.
How Bizstartz Helps With UK LTD Identity Verification (Fully Expanded)
Bizstartz provides exceptional and complete assistance for UK LTD compliance and identity verification especially for foreign founders.
Our new services are the following:
- Help with the preparation of all requested identity documents.
- Authorised agent verification for quicker approvals.
- Assistance on the foreign ID verification.
- Help on the submission of flagged or rejected documents.
- Correct structuring of PSC and shareholders.
- Helping with the easy incorporation of the company with the new changes.
- Ongoing support for the annual compliance and filing.
Bizstartz remains with you as a trusted partner through your compliance continual process, and your UK LTD remains active, legal, and ready for banking.
Frequently Asked Questions (Expanded Responses)
1. Is identity verification applicable to founders who are based outside the UK?
Yes. This rule applies without exception to all locations.
2. Am I able to form a company in the UK without going through the identity verification?
No. You are not able to complete the incorporation process without going through verification.
3. Is there a timeframe for verification to expire?
No, verification does not expire.
4. How long does the process of verification take?
- Direct verification from Companies House: Minutes to 48 hours.
- Agent verification: 1 to 3 business days.
5. What should I do if I keep failing to get verified?
Consider working with an authorized agent who would do a manual review of your documents to provide the needed compliance.
Final Thoughts: Moving to a More Open UK Business Practice
Identity verification is more than just an administrative process, it signifies the UK is becoming more transparent and more secure with a better international standing.
For founders who do not reside in the UK, compliance fits the following:
- Complete legal protection
- Seamless banking and payment authorizations
- Lowered risk of payment account problems
- Improved confidence of customers and investors
- Sustained stability of the business
Bizstartz provides that all processes and procedures will be professional and efficient, for global entrepreneurs, throughout the complete stream beyond entity formation to verification to annual compliance.
