10,000 companies removed from register for ‘illicit activities’

Companies House and the Insolvency Service have worked collaboratively to shut down thousands of companies thought to be involved in ‘illicit activities’, such as using fraudulent information to incorporate businesses in the UK.

The two working together have managed to catch up with 30 entities that had incorporated 30,000-50,000 companies they considered to be involved in ‘illicit activities’. 10,000 are in the process of being removed from the register.

They have managed to identify around £50m in UK property related to organised criminals in which asset recovery investigations are taking place.

Along with this, over 100,000 shell companies that have been formed over the last 20 years and are ‘known to be involved in a number of illicit activities’ have been analysed. The Insolvency Service is in the process of investigating these to wind them up and refer them to Companies House to be dissolved.

A number of case studies arose from the two working together such as dormant companies, false subsidiary claims, and cloned companies. 786 established restaurant companies were cloned between December 2023 and February 2024, which included celebrity chef Heston Blumenthal.

After this was discovered 2,895 appointments were removed from the register as well as 965 companies.

By the autumn of this year Companies House ‘should be able to’ make ID verification compulsory, which is currently voluntary for new directors and persons with significant control.

By spring 2026 it also hopes to force directors to verify their identities when filing any document, and make third party agents registered as a authorised corporate service provider (ACSP). Additionally, it hopes to be able to reject fillings and documents that disqualified directors have submitted.

Individuals will be able to protect their personal information such as signatures and business occupations from the public register, while new powers will be given to the registrar to register overseas entities, which the Department for Business and Trade says will improve transparency.

ID verification will also be extended to LLPs, overseas companies, companies authorised to register, and unregistered companies.

Those filing documents will be subject to stricter controls to enforce companies to confirm their ‘future activities will be lawful’.

Companies House has also been moving the registered addresses of some companies it considers there is a possibility of fraud, changing the addresses of 82,600 companies since March 2024.

If they fail to prove the address is legitimate then it faces being removed from the register completely. Additionally, companies registered at PO boxes have been receiving letters since March 2024 warning them that this would no longer be allowed, so far reducing the number of these to 700.

Trialled intervention tactics have been used by Companies House to detect misuse on the register, leading to ‘10,200 suspicious applications’, being rejected.

Late filers are also being targeted with penalties, which has focussed on those that have failed to file their confirmation statements on time. 419 warning notices have been issued because of this since March 2024 that have led to 192 penalty notices, although there are plans to increase the number of these issued ‘over the coming year’.

Overseas entities will also have to abide by new rules as Companies House looks to make the register more transparent to identify beneficial owners of them. In March this year there were more than 30,000 entities registered overseas that have to disclose information on trust structures.

‘Regulations have been passed that will allow trust information to be made available on application,’ said the Department for Business and Trade.

8,100 warnings to overseas entities have been issued either because of their failure to register or failing to update, leading to 444 penalties being issued for not registering mad 111 penalties issued for failing to update.

Companies House has since paused issuing more penalties as it looks to ‘strengthen its enforcement strategy’.

Business secretary Jonathan Reynolds said: ‘Economic growth is central to this government’s agenda. A transparent and accountable business environment is an essential foundation for growth, and action to tackle economic crime is as important as ever.

‘The reforms will benefit legitimate business whilst cracking down on bad actors, and the Government will continue to ensure we achieve both objectives as roll-out continues.’

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