Driven by the high number of directors falling victim to identity theft, new laws are set to make it easier for company executives to remove personal addresses from the public register. But Companies House is keen to stress that maintaining a degree of transparency remains a priority.
The Department for Business, Energy and Industrial Strategy, or BEIS, in a press release announcing the new regulations pointed to the use of publicly available information by fraudsters in order to pose as company directors. This has led to further concerns that the availability of information is leaving company directors open to violence and intimidation. Research by Cifas, a fraud prevention organisation, revealed that directors are victims of one in five cases of identity fraud.
Information on Companies House became freely available to the public in June 2015 and since then directors have expressed concerns at not being able to suppress their personal information, despite it putting them at serious risk of violence or intimidation.
Before 1 October 2009 the residential address of a company director was publicly available on the register of companies, unless a confidentiality order had been granted. New laws introduced on that date gave directors the ability to file a service address and keep their residential address off the public register.
Existing regulations help directors whose residential address remains public – because the information was filed before 1 October 2009 or because the director chose not to provide a service address. These directors can apply to make their residential address unavailable for public inspection by making an application to Companies House where there is a serious risk that they, or a person living with them, will be subject to violence or intimidation as a result of the activities of a company with which they are involved.
However, applications cannot be made for the removal of any information filed before 1 January 2003 and the current regime does not allow individuals at risk of identity theft or fraud to have their residential address removed from the register. The new laws will address this and should make anybody setting up a new business feel more comfortable that their data will be better protected.
Under the new laws individuals will no longer be required to show serious risk of violence or intimidation as part of an application to have their information removed or suppressed. Any information filed before 1 January 2003 can also be subject to an application.
Directors will still need to provide a business address but under the new laws personal addresses can be replaced with an alternative, where they can be contacted to ensure the company satisfies the legal requirements. To ensure transparency, some public authorities will still be able to access directors’ information, which includes personal addresses.
The use of electronic filing was only introduced at Companies House in 2003 and so it was thought that any application requesting the suppression of information filed on paper records (made available via microfiche) would be difficult to action without causing serious damage to the integrity of the public information.
However, developments in technology have made it easier to remove information from microfiche records and the new laws will allow applications relating to more historical data.
A company which applies to have information relating to all of its members removed or suppressed will still need to satisfy the serious risk of violence or intimidation test as there are concerns about the possible effect on corporate transparency if large scale redactions are made. But members will be able to apply independently of the company without having to satisfy the intimidation test.
Current directors will be required to provide a service address which will be publicly available in place of their own address. Former directors, of active companies, will not need to provide a service address and instead their residential address will be partially suppressed to show only the first half of the postcode. This is thought to strike the right balance between transparency and protection of the individual.
These changes, which are due to come into force by the end of summer 2018, are part of the Government’s ongoing Industrial Strategy aimed at maintaining the UK’s reputation as one of the best business hubs in the world.