Draft Limited Liability Partnerships (Application and Modification of Company Law) Regulations 2025 Draft Economic Crime and Corporate Transparency Act 2023 (Consequential, Incidental and Miscellaneous Provisions) Regulations 2025 Draft Register of People with Significant Control (Amendment) Regulations 2025

Justin Madders Excerpts

Tuesday 2nd September 2025 General Committees

[The Parliamentary Under-Secretary of State for Business and Trade (Justin Madders)]

I beg to move,

That the Committee has considered the draft Limited Liability Partnerships (Application and Modification of Company Law) Regulations 2025.

[The Chair]

With this it will be convenient to consider the draft Economic Crime and Corporate Transparency Act 2023 (Consequential, Incidental and Miscellaneous Provisions) Regulations 2025 and the draft Register of People with Significant Control (Amendment) Regulations 2025.

[Justin Madders]

It is a pleasure to see you in the Chair, Mr Twigg.

This set of regulations is part of the Government’s secondary legislation programme implementing the Economic Crime and Corporate Transparency Act 2023, which I will refer to hereafter as the 2023 Act. The 2023 Act is a crucial tool in supporting the Government’s aim to combat economic crime, improve corporate transparency and increase trust in the UK’s business environment. It delivers the most significant reforms to Companies House in more than 180 years. It was brought in by the previous Government, but we are pleased to carry on implementing its provisions. Companies House has already made significant progress in implementing the reforms since the 2023 Act became law, including by removing false and misleading data. For example, from 4 March 2024 to 31 July 2025, Companies House removed 113,300 registered office addresses, 88,000 officer addresses and 71,000 PSC—persons with significant control—addresses.

April this year saw Companies House launch its identity verification service. Hundreds of thousands of individuals have already successfully verified their identities. Reaching that major milestone has ensured that both customers and Companies House are ready for the introduction of mandatory identity verification in November. Identity verification is the centrepiece of the Companies House reforms. The statutory instruments before the Committee today will support the delivery of identity verification, and include other technical reforms that relate to the PSC framework.

First, the draft Limited Liability Partnerships (Application and Modification of Company Law) Regulations 2025 apply several of the reforms to companies contained in the 2023 Act to limited liability partnerships, or LLPs. In particular, the instrument introduces identity verification for LLP members and PSCs, and prohibits disqualified directors from acting as an LLP member. It removes the requirement for LLPs to keep their own local registers of members and PSCs. Going forward, LLPs will report their member and PSC information directly to Companies House. Extending company reforms to LLPs ensures that the law applies equally across different corporate entities. Not only will that minimise opportunities for LLPs to be misused by criminals; it will ensure that both LLPs and their customers benefit from a more transparent and reliable business environment.

The draft Economic Crime and Corporate Transparency Act 2023 (Consequential, Incidental and Miscellaneous Provisions) Regulations 2025 are largely technical, and will ensure the smooth implementation of key elements of the 2023 Act. The instrument makes necessary consequential amendments to primary and secondary legislation following the removal of the requirement for companies and other entities to retain their own local registers of directors, secretaries and PSCs. Instead of those local registers, there will be only one central register at Companies House. Searchers will therefore be able to rely on a centralised Companies House register as the definitive version.

The draft regulations will also introduce provisions to support the roll-out of identity verification through the mandation of unique identifiers. These codes are generated for each verified individual, and will be used to prove an individual’s verified identity status. Not proceeding with the instrument would mean that crucial parts of the Companies House reform package would not be able to operate properly. The draft regulations will ensure that the legislative framework is consistent, and prevent references to repealed provisions from persisting in law.

Finally, I move to the draft Register of People with Significant Control (Amendment) Regulations 2025. This instrument makes technical amendments to the PSC regime, the Companies Act 2006 and the Register of People with Significant Control Regulations 2016. It ensures that certain important information relating to PSCs, including additional matters that were previously recorded in local registers, is now reported to Companies House. These changes will maintain the completeness and accuracy of the PSC information on the register.

I highlight that the explanatory memorandum to this instrument contained a small error when initially published: paragraph 5.3 referred to the Limited Liability Partnerships (Application and Modification of Company Law) Regulations 2025 by the wrong title. I am sure that Members were about to intervene on me on that point. I confirm that it has now been corrected.

I stress that all these regulations are needed to make the UK a safer and more transparent place to do business. Businesses, the regulated sector and other users of the company register will benefit from more accurate and reliable data to inform their transactions. I commend the draft regulations to the House.

--- Later in debate ---

[Justin Madders]

I welcome the shadow Minister back after the summer recess. It is a little disturbing—discombobulating, possibly—to hear the Opposition arguing against legislation that they introduced when they were in government, although it is not the first time, I suppose. I think that there was cross-party agreement in the previous Parliament that it is important to clamp down on economic crime by ensuring the integrity of the Companies House register and that it is accurate and up to date.

[Mr Luke Charters (York Outer) (Lab)]

I share my hon. Friend’s discombobulation. I had a career in countering financial crime before entering this place. Shell companies are rampant, and Companies House needs these powers. Ultimately, when it comes to fraudulent claims against the public purse, His Majesty’s Revenue and Customs and others across the public realm are all dependent on Companies House reform. Director identity verification is necessary and proportionate, and as my hon. Friend said, it is discombobulating that the Opposition oppose it.

[Justin Madders]

I thank my hon. Friend for his intervention. I think that is now three references to “discombobulating”. That is quite a record for this early in September. Members have been pretty clear about the value of this legislation and the draft regulations that we are debating today, and it is disappointing that we have heard them wrapped up in an argument about red tape.

The Companies House data is currently valued by business users—the people who actually invest in business in this country—at between £1 billion and £3 billion a year. It is a hugely important tool for investors and other businesses to understand the business environment, so the reliability of that data is paramount. These reforms will ensure that people know who they are dealing with, that those people’s identities have been verified, and that we do not have the plethora of fake companies that have been set up on the register in recent years. We all know the consequences of that.

The shadow Minister mentioned enforcement, and made reference to the burdens on it. The Insolvency Service is generally responsible for any prosecutions under the legislation, but between September 2024 and August 2025, 99% of the entities that were required to record a PSC did so correctly at incorporation. It is quite often the case that those that have not responded are not doing so because the companies simply are not active any more and have been taken off the register.

Part of the new landscape is that the fees that are charged by the various bodies for registering are meant to be on a cost-recovery basis, and the number of fines issued and prosecutions pursued are part of that overall landscape. It is important that there is proportionate but effective enforcement. The shadow Minister asked what we will be doing in terms of outcomes. We will certainly expect Companies House to do regular reports on the numbers of companies that have incorporated, and where there are issues with people not providing IDV or details of the PSC. I have given some further information about progress to date, but when the full system goes live in November, I fully expect Companies House to provide regular updates to Members about progress on that. On that note, I commend the draft regulations to the Committee.

Question put and agreed to.

DRAFT ECONOMIC CRIME AND CORPORATE TRANSPARENCY ACT 2023 (CONSEQUENTIAL, INCIDENTAL AND MISCELLANEOUS PROVISIONS) REGULATIONS 2025 

Resolved,

That the Committee has considered the draft Economic Crime and Corporate Transparency Act 2023 (Consequential, Incidental and Miscellaneous Provisions) Regulations 2025.—(Justin Madders.)

DRAFT REGISTER OF PEOPLE WITH SIGNIFICANT CONTROL (AMENDMENT) REGULATIONS 2025 

Resolved, 

That the Committee has considered the draft Register of People with Significant Control (Amendment) Regulations 2025. —(Justin Madders.)