Corporate · · 6 min read
Director identity verification: what the first prosecutions show
On 16 September 2026, City of London Magistrates' Court fined three company directors in the first prosecutions brought by the Insolvency Service for identity verification offences. The fines were modest. The significance lies elsewhere: one of the three had verified their own identity and was convicted anyway, for allowing a fellow director to keep acting while unverified.
For startups, where a board is often two or three founders and an investor nominee, that point deserves attention.
Where the requirement comes from
Identity verification is one of the central reforms introduced by the Economic Crime and Corporate Transparency Act 2023. The Act strengthened the powers of Companies House with the stated aim of improving the accuracy of the company register and reducing the misuse of UK companies.
According to the Insolvency Service's announcement of 17 September 2026:
- New directors. Since 18 November 2025, a newly appointed director has been required to verify their identity with Companies House before acting as a director.
- Existing directors. Directors already in office on that date are required to verify during a 12-month transition period, at the point the company files its next confirmation statement.
- People with significant control. Companies House has made clear that the regime also applies to people with significant control, not only directors.
Verification can be completed online through Companies House free of charge, or through an Authorised Corporate Service Provider (a business authorised by Companies House to carry out verification on behalf of others).
There is no opt-out. The Insolvency Service's announcement puts it plainly: directors who continue to act without verifying risk investigation and prosecution.
What happened in the first cases
The cases involved two private companies. The announcement describes the conduct in some detail, and three features stand out.
Acting while unverified. Two directors continued to act after the requirement applied to them. One took part in board-level decisions and signed company accounts; the other signed and delivered accounts. Both verified eventually: one around nine months after the deadline and shortly before the court hearing, the other on or around 28 May 2026. Late verification did not prevent a conviction.
Failing to stop a co-director. The third director had verified their own identity. They were prosecuted for failing to take reasonable steps to prevent their co-director from continuing to act while unverified, despite knowing of the requirement. The Insolvency Service described this as a responsibility each director has to ensure the company does not allow an unverified person to act as a director.
Confirmation statements. In both companies, the directors were also convicted of failing to file a confirmation statement on time. Since existing directors verify at the next confirmation statement, a late filing and a missed verification tend to travel together.
The Insolvency Service noted that in both cases the directors had been given multiple opportunities to comply before enforcement action was taken. The fines ranged from £80 to £307, plus costs and a victim surcharge. Those figures reflect the facts of these particular cases and are not a reliable guide to how any other case would be dealt with.
Why this matters for startups in particular
Large companies tend to have a company secretary or an outsourced corporate services team tracking filings. Early-stage companies often do not. A few situations are worth thinking through.
Founders who incorporated before November 2025. A founder who has been a director since before 18 November 2025 falls into the transition group. Their deadline is tied to the company's next confirmation statement, which means the practical deadline varies from company to company. It is easy for this to slip if nobody owns the confirmation statement date.
New appointments during a funding round. Investor nominee directors, independent non-executives and new co-founders appointed after 18 November 2025 must verify before they act. Completion of a round often happens quickly, with board appointments taking effect the same day. Under the new regime, a new director who attends a board meeting or signs documents before verifying is acting while unverified.
The co-director point. The third conviction shows that verification is not purely a personal matter. A director who knows a colleague has not verified, and does nothing about it, has their own exposure. On a small founding board, that knowledge is usually shared.
Signing accounts and filings. Both directors convicted of acting while unverified had signed company accounts. Signing statutory filings is one of the most visible acts a director performs, and it leaves a clear record.
Points boards generally need to consider
Without addressing any company's specific position, boards of early-stage companies in England and Wales commonly need to consider:
- whether each current director and each person with significant control has completed verification;
- when the company's next confirmation statement is due, since that sets the deadline for directors in the transition group;
- how verification is built into the process for appointing new directors, so that it happens before the appointment takes effect rather than after;
- who on the board is responsible for monitoring filing dates and verification status, particularly where there is no company secretary;
- whether an Authorised Corporate Service Provider is being used, and if so, what the arrangement covers.
What remains uncertain
These are the first prosecutions, and they were brought in a magistrates' court. They establish that the Insolvency Service is prepared to prosecute, and they illustrate the kind of conduct it treats as an offence. They do not set binding precedent, and the reported facts involved repeated non-compliance after warnings. How the authorities approach a single short delay, or a director who verified promptly once alerted, is not something these cases answer.
The wider consequences of acting while unverified, for example for the validity of decisions taken or documents signed by an unverified director, or for disqualification proceedings, are not addressed in the announcement and are outside the scope of this article.
Jurisdiction and source
The Companies Act regime and the identity verification requirement apply across the UK. This article considers the position in England and Wales only. Prosecution and court procedure differ in Scotland and Northern Ireland, and those are not covered here.