Louise Mahon

The introduction of mandatory identity verification is perhaps the most fundamental change. All directors, People with Significant Control (PSCs), and those filing on behalf of companies must now verify their identity with Companies House.

In practice, this will be done via GOV.UK One Login, through an Authorised Corporate Service Provider (ACSP), or in person (via the Post-Office). Once verified, individuals will be issued with a unique identifier linking them to all company roles.

For new incorporations, this becomes part of the formation process. Existing companies will transition over time, with verification linked to confirmation statements. Crucially, non-compliance is not administrative; depending on the breach, it may result in criminal liability, civil penalties or restrictions on filings. That represents a marked shift from the historic approach to company filings.

How Scottish SMEs should prepare

For Scottish SMEs, often operating with lean teams and relying on trusted advisers, the reforms are less about legal complexity and more about operational readiness. First, verify early. Directors and PSCs should complete identity verification ahead of deadlines to avoid delays to filings or transactions.

Second, understand who is filing. Many Scottish companies rely on accountants or solicitors to manage filings. Those advisers must themselves be verified or registered as ACSPs, something businesses should confirm now.

Third, revisit governance processes. While certain statutory registers will no longer need to be maintained internally, the obligation to keep information accurate at Companies House becomes more immediate. Changes in directors or PSCs will now trigger real time compliance considerations.

For businesses in more remote or rural parts of Scotland, where digital connectivity or access to in person verification may be more challenging, forward planning will be critical.

A new direction for corporate transparency

Taken together, these reforms signal a clear policy direction. Companies House is no longer simply recording information; it is being empowered to check, question, reject and, where necessary, remove it.

Alongside identity verification, we are seeing tighter rules on registered office addresses, enhanced scrutiny of filings, and expanded powers to share data with enforcement agencies. For Scottish businesses, particularly those seeking investment or lending, this increased transparency may enhance credibility and trust.

Twenty years on: progress, but not perfection

The 2006 Act modernised company law but left gaps around verification and enforcement. The new regime addresses many of those weaknesses.

However, challenges remain. Ensuring accessibility, avoiding disproportionate burden on smaller businesses, and supporting those less digitally connected will all be critical, particularly in a Scottish context. The balance has shifted: ease of incorporation is no longer the sole priority; transparency and accountability now sit alongside it.

From a practical perspective, taking advice early can help avoid disruption and ensure compliance becomes part of business as usual rather than a last-minute exercise.

Louise Mahon is a partner at Freeths