Key takeaways
Mandatory identity verification introduced
New rules require directors and PSCs to verify.
Filing restrictions increase lender risk
Unverified individuals may delay key Companies House filings.
Lenders must update documentation
Agreements should reflect on new verification and reporting duties.
The wide-ranging reforms to Companies House introduced by the Economic Crime and Corporate Transparency Act 2023 (ECCTA) represent one of the most significant changes to Companies House's role in improving transparency over UK companies and other legal entities in recent years. As discussed in our previous article, these reforms introduce mandatory identity verification requirements for those who run, own or control UK companies, and fundamentally change who is permitted to file information at Companies House.
While the reforms are intended to improve transparency and help prevent economic crime, they also raise a number of practical and legal considerations for lenders and will affect the conditions precedent collected before a new facility agreement is entered into, as well as the representations and ongoing reporting obligations in facility documentation. In this article we will briefly recap the key new requirements, highlight issues from a lender’s perspective and consider how lenders may wish to respond in practice.
Key new Companies House requirements
Under the new regime, the following individuals must verify their identity by the deadlines noted below:
Who must verify | Deadline |
|---|---|
New directors | Before appointment is registered |
Existing directors | Within 12‑month transitional period (via confirmation statement) |
People with Significant Control (PSCs) | Within 12-month transitional period |
LLP members | Same requirements as directors |
Identity verification can be completed directly via Companies House using GOV.UK One Login, or indirectly through an Authorised Corporate Service Provider (ACSP), such as a regulated solicitor or accountant. Once verified, individuals are issued with a unique identifier, which must be used for future Companies House filings.
Consequences of non‑compliance
Failure to comply with the identity‑verification requirements carries significant consequences, including:
inability to make filings at Companies House;
exposure to civil penalties or criminal sanctions;
being publicly flagged on the register as 'unverified'; and
being legally prohibited from acting as a director.
Confusingly, any acts carried out by an unverified director remain legally valid, despite their prohibition from acting. This creates practical uncertainty for advisers: if an unverified director is technically unable to act, it is unclear whether instructions they give - for example, to external legal counsel - can safely be treated as binding instructions of the company. This risk emphasizes the importance of ensuring verification is completed promptly and monitored on an ongoing basis.
Restrictions on who can file
ECCTA also significantly restricts persons who are able to submit filings to Companies House to:
Individuals who have completed identity verification
Professional advisers registered as ACSPs
Other verified third‑party agents authorised to submit filings for clients
It is worth noting that a recent update to ECCTA extended the deadline for advisers to register as ACSPs to November 2026.
Over time, it appears that Companies House is moving away from its traditional role as a passive recipient of information towards an active 'gatekeeper' role, with enhanced powers to query or reject filings it considers inaccurate, incomplete or unlawful.
Key issues from a lender perspective
One of the immediate concerns for lenders is the validity and timing of Companies House filings. Facility agreements rely heavily on the accuracy of public records such as confirmation statements, security registrations, and director appointment or resignation notices. Where directors or filing agents have not completed identity verification, filings they are required to submit may be delayed or rejected. In practice, this is unlikely to affect security registrations - which are typically handled by the lender’s own solicitors, who should be registered as ACSPs - but it may affect filings that must be made by the borrower group, such as amended articles required as a condition precedent. Any delay can have a knock‑on impact on funding timetables or longstop dates.
There is also a governance risk where unverified directors or PSCs continue to act despite being prohibited from doing so. Although their acts remain legally valid, the fact that they should not be acting in that capacity creates uncertainty for lenders. It raises questions about the reliability of board approvals, the validity of officers’ certificates or compliance certificates, and could heighten enforcement risk if the company’s governance is later scrutinised by regulators or the courts.
More broadly, the reforms have reputational and compliance implications. Lenders increasingly depend on Companies House data for KYC, AML and ongoing monitoring. Public identification of 'unverified' individuals, together with Companies House’s enhanced powers to query filings, may require lenders to update internal diligence processes and decide how to respond where borrowers fall behind on verification obligations.
How lenders may wish to respond
In light of these changes, lenders may wish to:
review and update conditions precedent in facility documentation.
in some cases, it may be appropriate to require confirmation that all directors and PSCs have completed identity verification, or that they will do so before the next confirmation statement is due.
seek evidence that unique identifiers have been issued and that key Companies House filings are being submitted by a verified individual or an authorised ACSP.
Enhance representations and warranties (for example, requiring a borrower represent that all directors and PSCs are compliant with identity verification requirements, that no individual is prohibited from acting as a director and that all statements could then be linked into existing default or remedy frameworks.
Address identity verification through ongoing undertakings and reporting requirements. This could include obligations to maintain compliance with identity verification requirements and to notify lenders of any delay or failure. Over time, compliance with Companies House identity verification may also be linked to information undertakings and compliance certificates.
Check whether their lawyers are registered as ACSPs before they are appointed
These considerations may be particularly relevant in new borrower transactions, acquisition finance and refinancings involving changes to governance.
Practical takeaway and conclusion
Although many of the reforms are still being implemented in practice, lenders who take a proactive approach to updating documentation and internal processes are likely to benefit from reduced execution risk, greater certainty around borrower authority and governance, and closer alignment with the evolving role of Companies House as a trusted source of corporate information.
The Companies House reforms represent more than a technical compliance exercise. They materially affect how lenders interact with borrower information and corporate governance. By reviewing internal requirements around conditions precedent, representations and ongoing undertakings now, lenders can help ensure that facility documentation remains robust, future proofed and aligned with the new regulatory landscape. It will also be beneficial to see how the Loan Market Association responds to these developments in its template documentation.
