First prosecutions brought by the Insolvency Service against individuals for acting as directors without having verified their identity
Three individuals have been successfully prosecuted and fined by the Insolvency Service for acting as directors without having verified their identity in breach of the Companies Act 2006 (CA 2006).
Under changes made to the CA 2006 by the Economic Crime and Corporate Transparency Act 2023 (ECCTA), it is an offence for an individual to act as a director of a company unless their identity has been verified. For more details on the identity verification (IDV) regime, see our snapshot here (and on the ECCTA in general, our blog here).
Two of the three individuals who have been prosecuted had continued to act as directors of companies without having verified their identity. The third individual had verified their own identity, but was fined for allowing one of the other individuals to continue to act as a director of their company without having complied with the IDV requirements. Under the CA 2006, where an individual acts as a director without being verified, an offence is committed not only by that individual but also by the company in relation to which the individual purports to act and by the officers of the company.
The Insolvency Service said that the prosecutions were brought only after multiple efforts had been made by Companies House to try to secure compliance. Companies House – who referred the matter to the Insolvency Service for prosecution – commented that these cases “send a clear message that [IDV] is not optional”.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
[View Source]
