Companies House ID verification: what unverified directors now face

An unverified director who keeps acting after their company’s verification date commits a criminal offence under section 167M of the Companies Act 2006, and so does any co-director who fails to take reasonable steps to stop them. The decisions they take still bind the company, because section 167M(6) makes the offences the only consequence. The real danger lies further down the line: repeated offences and missed confirmation statements now count towards disqualification, and acting while disqualified is what makes a director personally liable for the company’s debts.

Most directors asking this ignored a Companies House email in a difficult year, or assumed the rule only covered new appointments, and now face a petition with a compliance problem in the background. They are surprised to learn that being unverified does not invalidate their board decisions, and just as surprised by how quickly the offences add up to a ban.

The legal duty to verify

Section 167M(1) of the Companies Act 2006 provides that “an individual must not act as a director of a company unless the individual’s identity is verified”. Section 167M(2) requires the company itself to “ensure that an individual does not act as a director unless the individual’s identity is verified”. The section came fully into force on 18 November 2025, the same date on which the old section 167 notification duty was replaced by section 167G, a change we explain in our guide to resigning as a director while a petition is pending.

Under section 1110A(1), an identity “is verified” when the registrar verifies it directly or when an authorised corporate service provider delivers a verification statement confirming it has done the check. The duty sits alongside the familiar sources of exposure set out in our page on the risks directors face when a company is in financial difficulty, and shadow directors are treated as officers for the purposes of the offence.

When did the prohibition start for your company?

For anyone appointed on or after 18 November 2025, it started on appointment. Section 167G(3)(c) requires the notice of a new director to contain “a statement that their identity is verified”, so an unverified appointment cannot lawfully be notified at all. For directors already in office, regulation 4 of the Economic Crime and Corporate Transparency Act 2023 (Commencement No. 6 and Transitional Provisions) Regulations 2025, SI 2025/1118, ties the obligation to the company’s next confirmation statement during a “transitional period” of “12 months beginning with 18th November 2025”, which ends with 17 November 2026. A company’s filing history can be checked using the searches in our guide to checking whether a company has entered an insolvency process.

Regulation 4(6) switches section 167M on for each existing director the day after the company delivers that confirmation statement, or the day after its delivery period ends if it delivers nothing. Most existing directors have therefore been bound for months, because their company’s statement fell due earlier in the year. A director who reads “November 2026” as a personal deadline may have been acting unlawfully since the spring, which matters when the consequences of a winding up petition for directors are about to be examined.

Who commits the offence, and the first prosecutions

Section 167M(3) makes it an offence for the individual to act while unverified. Under section 167M(4), if the company breaches its own duty, an offence is committed by the company and “every officer of the company who is in default”. Section 1121(3) defines that officer as one who “authorises or permits, participates in, or fails to take all reasonable steps to prevent, the contravention”, so a verified director can be convicted because of a colleague. Each offence is summary only and, in England and Wales, punishable by a fine under section 167M(5), adding to the personal exposure discussed in our article on director liability after a winding up petition.

On 17 September 2026 the Insolvency Service and Companies House announced the first convictions. Three directors were fined, and one of them had verified his own identity but was convicted for failing to take reasonable steps to prevent his co-director acting while unverified. The prosecutions followed repeated attempts to secure compliance. The Insolvency Service also brings the public interest petitions covered in our report on seven linked companies wound up by the High Court, and it investigates directors after a compulsory liquidation.

Why the board’s decisions still stand

Section 167M(6) provides that the offences are the only consequences of a breach, “so that, for example, a contravention does not in any way affect the validity of an individual’s acts as a director”. Section 167N(7) says the same of directors whose appointment has not been notified. A resolution to oppose a petition, an instruction to solicitors or a signed contract is valid even if an unverified director voted for it. Creditors hoping to unwind a transaction on that ground will find no support in the Act, and debtors relying on it to resist a petition they intend to oppose need a genuine ground instead.

Validity is a separate question from lawfulness. Each witness statement signed, hearing attended or payment authorised may be a further offence, and that conduct becomes part of the record an office holder later reads. A director who plans to keep trading, as described in our guide to trading after a petition is presented, or to seek administration or a moratorium once a petition has been served, should verify first. It takes far less time than the hearing.

The confirmation statement trap

Regulation 4(5) of SI 2025/1118 makes the identity verification statement part of the company’s duty under section 853A(1) to deliver its confirmation statement. A company with an unverified existing director therefore cannot deliver a compliant statement, and section 853L(1) makes failure to deliver within 14 days of the end of the review period an offence by the company and every officer in default, with a daily default fine in England and Wales of up to “the greater of £500 and one-tenth of level 4 on the standard scale”. One oversight has become two offences, and a missed statement is also visible to anyone running the register searches in our guide to checking a company’s status.

Companies House’s published enforcement approach describes a default letter, a short window for representations, and then prosecution, referral to the Insolvency Service or financial penalties at company or officer level. It also lists “removing defaulted companies from the register” among its tools. Creditors who see a debtor heading for removal should use the routes in our guide for creditors whose debtor has been struck off or dissolved, and should check where to serve in light of our analysis of service at a Companies House default address.

From missed filings to a disqualification order

The 2023 Act amended the Company Directors Disqualification Act 1986 so that unverified acting counts expressly towards a ban. Section 3(3B)(b) now includes “sections 167M and 167N of the Companies Act 2006” among the relevant provisions. Under section 3(2), persistent default may be “conclusively proved” by three or more defaults in the five years ending with the application, and section 3(3)(aa) treats a Companies House financial penalty as a default. Section 5(3) lets a convicting court disqualify where there have been at least three relevant findings of guilt in five years. Either route carries a maximum of five years, and we explain how these applications are fought in our page on defence strategies in disqualification proceedings.

A late confirmation statement, an unverified director acting and a co-director’s failure to stop it can all flow from one oversight, and the Companies House guidance treats three or more offences over five years as likely to be serious. Directors who have received a default letter should take advice before replying, because the representation is the first evidence in any later case and is where our solicitors and barristers who defend disqualification proceedings can make the most difference.

If the company is wound up

Once a company becomes insolvent, section 6 of the 1986 Act obliges the court to disqualify a director whose conduct “makes the person unfit to be concerned in the management of a company”, for between two and fifteen years under section 6(4). Paragraph 6 of Schedule 1 directs attention to “any material breach of any legislative or other obligation of the director which applies as a result of being a director”, and paragraph 7 to how often it happened. An unverified director has that kind of breach on the public record before the liquidator asks a single question, as our guide to the impact of a compulsory winding up order on directors explains in the wider context.

Verification failures rarely carry a disqualification case alone. They usually sit beside allegations of trading on at HMRC’s expense or preferring connected creditors, and they undermine the director’s account of their own diligence. Anyone facing the official receiver should read our guide to the duty to co-operate under sections 235 and 236 and our article on personal liability in the twilight period before insolvency.

Where personal liability for company debts begins

Being unverified does not, by itself, make a director liable for what the company owes, because section 167M(6) confines the consequences to the offences. Liability arrives one step later. Under section 15(1)(a) of the 1986 Act, a person involved in management in breach of a disqualification order is “personally responsible for all the relevant debts of a company” incurred meanwhile, jointly and severally under section 15(2), and section 13 makes acting while disqualified punishable on indictment by up to two years’ imprisonment. A disqualified director who carries on through a new company also meets the problems in our guide to reusing a liquidated company’s name under sections 216 and 217.

Wrongful trading and misfeasance claims run in parallel, as do HMRC’s personal liability notices, which we explain in our 2026 guide.

Companies House enforcement is a different system from HMRC enforcement

Searches for a “director verification penalty” often land on HMRC material, and the two regimes are easily confused. Companies House sanctions arise under the Companies Act 2006 and lead to the magistrates’ court or a disqualification. HMRC penalties arise under the tax legislation and are challenged by review and appeal to the tribunal, as described in our page on challenging HMRC penalties. The two often meet in one company, because HMRC is the most frequent petitioning creditor and a director with a verification problem is often also facing an HMRC winding up petition or statutory demand, with HMRC watching for the phoenix company fraud that tends to follow. Each regime needs its own response.

When an adviser took on the verification and failed

Many directors left verification to their accountant or company secretarial provider and learned from a default letter that nothing was filed. Whether a claim lies depends on what the adviser agreed to do and what loss followed. A criminal fine imposed on the director is unlikely to be recoverable, but wasted costs and the cost of resisting disqualification may be, as discussed in our guidance on claims against negligent accountants. The company and the director may have different claims, a distinction drawn in our article on whether directors can sue advisers for business losses, and the limitation rules for professional negligence claims should be checked early.

The deadline that governs your position

The transitional period ends with 17 November 2026, but your own date is the day after your company delivered its confirmation statement in that period, or the day after the delivery period closed if it did not. If that date has passed, every act as a director since then is a potential offence, and only verification stops the count. A director who would rather step down should read our guide to resigning mid-petition first, because section 154 requires a private company to have at least one director and any replacement must be verified before the appointment can be notified.

Late representations to Companies House are not considered, so a default letter needs an answer within its stated window. If a petition or statutory demand has also arrived, the court timetable runs independently, and our article on trading during a winding up petition and our guide to responding to statutory demands apply alongside everything above.

How We Can Help

We act for directors whose compliance failures have become part of an insolvency problem, opposing winding up petitions, answering Companies House and Insolvency Service correspondence, defending disqualification applications and resisting liquidators’ personal liability claims. Verification itself is a short process with Companies House or an authorised corporate service provider, and you do not need a law firm for it. We do not offer free legal advice or legal aid, and we generally take on substantial matters, such as a contested winding up petition or disqualification proceedings.

We are dual qualified solicitors and barristers with chambers in Middle Temple, next to the Royal Courts of Justice, so the lawyer who advises you can also appear for you. We offer a fixed fee advice conference with both a solicitor and a barrister, at which we review your correspondence, your company’s filing position and any petition or demand, and set out a plan. To arrange one, complete our case assessment form.

This article is for general information only and does not constitute legal advice. The law is stated as at 13 November 2026. You should take specific advice on your own circumstances before acting or refraining from acting.

ALWAYS OBTAIN SPECIFIC GUIDANCE & ADVICE

The information on this website is not legal advice; you should always obtain specific advice on the circumstances of your case. Our Winding-up Petition Solicitors & Barristers provide specialist legal advice based on decades of expertise. Request a legal assessment or call +442071830529 to get in touch. For regulatory reasons we do not take on low value cases nor provide free legal advice, information or guidance and our team cannot answer questions from non-clients.