# How Companies House works and why it was so easy to lie to > For 180 years the UK company registrar recorded whatever it was told without checking, and the identity-verification regime now rolling out under the 2023 Economic Crime Act is the first serious attempt to close the gap. *Section: Business — By Marcus Vale (Editor-in-Chief & Business & Markets Editor) — Published July 12, 2026 — 3 min read* Canonical URL: https://dailyjunction.org/business/how-companies-house-works-and-why-it-was-so-easy-to-lie-to Tags: companies-house, corporate-transparency, fraud, shell-companies, economic-crime ## Key takeaways - From the Joint Stock Companies Act 1844 until the Economic Crime and Corporate Transparency Act 2023, the registrar had a duty to record filings but no power to verify them, so false names, addresses and ownership entries went straight onto the public register. - A UK company could be formed online in under 24 hours for £12 with no identity check, which made British companies, LLPs and Scottish limited partnerships standard components in laundering schemes such as the laundromats exposed in the 2010s. - Directors and people with significant control must now verify their identity through GOV.UK One Login or a registered agent, incorporation costs £50, and the registrar can query, reject and strike out false information rather than merely file it. Companies House holds the public record of every limited company in the United Kingdom, more than five million of them, and for most of its history it operated on a principle that sounds absurd once stated plainly: it wrote down whatever it was told. The registrar's statutory duty, inherited from the Joint Stock Companies Act 1844, was to receive documents and place them on the register. Checking whether the documents were true was nobody's job. The consequences followed logically. Until 2024 anyone, anywhere in the world, could form a UK company online for £12, typically within 24 hours, without showing a passport, proving an address, or demonstrating that the named directors existed. The register accumulated directors called things no parent ever chose, companies at addresses their occupants had never heard of, and beneficial-ownership declarations that were pure fiction. One businessman, Kevin Brewer, demonstrated the problem in the plainest way possible by registering companies naming serving government ministers as directors without their knowledge; the state's response was to prosecute him for false filing, which rather proved his point, since the false filing had been effortless and the register had accepted it without a murmur. The gap between Britain's clean-jurisdiction reputation and its no-questions-asked registry made UK entities a standard part in international laundering. The investigative work on the so-called laundromats of the 2010s, which moved billions out of Russia, Moldova and Azerbaijan, kept finding the same components: Scottish limited partnerships and English LLPs, formed in bulk by agents, with nominee partners in secrecy jurisdictions and accounts that were never filed or never true. A Scottish limited partnership had the particular attraction of legal personality with no obligation, for years, to name a beneficial owner. The persons-with-significant-control register introduced in 2016 was meant to fix ownership opacity, but because entries were unverified, a launderer simply lied on that form too. Enforcement barely bit. False filing was an offence under the Companies Act 2006, but prosecutions were rare, fines were small, and the registrar had no general power to remove information it suspected was false. Companies House was funded to run a filing cabinet, with roughly a tenth of the register's growth matched by any growth in scrutiny, and fraud victims discovered that having your name or home address hijacked onto the register could take months to unwind because the registrar lacked authority to act on its own initiative. ## What the 2023 Act actually changes The Economic Crime and Corporate Transparency Act 2023 rewrites the registrar's role. Companies House now has statutory objectives that include ensuring the accuracy of the register and preventing companies being used for unlawful purposes, and with them the powers those objectives require: to query filings, reject them, demand supporting evidence, share data with law enforcement, and remove material it has reasonable grounds to doubt. The incorporation fee rose to £50 in May 2024, still cheap by international standards but enough to fund investigation teams, and the registrar has since struck tens of thousands of false or hijacked entries from the register. The centrepiece is identity verification. New directors and people with significant control must prove who they are, either directly through GOV.UK One Login or through an authorised corporate service provider that is itself supervised for anti-money-laundering purposes, with the requirement becoming mandatory for new appointments from late 2025 and existing officers brought in as their companies file confirmation statements. An unverified person cannot lawfully act as a director. Formation agents, the industry that mass-produced shell companies, must now be registered and can be held responsible for the verifications they perform. Sceptics note the workarounds that remain: verified frontmen can still act for hidden principals, nominee arrangements are not abolished, and a register is only as good as the enforcement behind it. That caution is warranted. It is still a genuine turning point, because the legal architecture has inverted. For 180 years the burden sat on the public to discover that the register was wrong; it now sits on the filer to prove who they are, and on the registrar to police what it publishes. Britain built the world's most open company register and let it become the world's most lied-to one. The lying, at last, carries a cost at the door. --- Daily Junction — https://dailyjunction.org/business/how-companies-house-works-and-why-it-was-so-easy-to-lie-to