Company registration in the UK

The UK Government is reforming Companies House and the company registration regime in the UK. This is in response to concerns raised about the vulnerability of the company registration system to abuse, and the reliability of the company data collected and published by Companies House.

Ease of incorporation

According to the World Bank, the UK is one of the easiest places in the world to register a company, and Companies House has committed in its 2025–26 Business Plan to continue to “deliver excellent customer service levels and maintain our business as usual services as we implement significant change.”

Until 1 May 2024, the fee to incorporate a company online was £12. These fees increased on 1 May 2024 to £50, but remain some of the lowest in the world. For comparison, the average cost of registering a limited company in the European Union in 2018 was 300 euros (around £260).

The Department for Business and Trade highlights the fact that a private limited UK company can be set up in just 24 hours.

Companies House is an executive agency of the Department for Business and Trade responsible for:

• incorporating, maintaining and dissolving limited companies
• examining and publishing company information
• holding and maintaining the Register of Overseas Entities (ROE), providing transparency about who owns land and/or property in the UK

Challenges that accompany ease of incorporation

Before 18 November 2025, it has not been a mandatory requirement for the directors of UK companies to verify their identities or their addresses, before setting up a company. There is also no requirement to have a UK based director or shareholder when setting up a company which has not been modified by the reform.

Critics have argued that the low barriers to registering a company and limited identification checks leave the UK system vulnerable to abuse [subscription only]. The UK companies register contained around 5.4 million companies in June 2025. For context, at the start of 2023, the Department for Business and Trade estimated that there were only 2.1 million companies actively trading.

In a January 2024 report, financial risk assessment firm Moody’s found globally the UK has the highest number of companies displaying behaviours which they found to be commonly associated with shell companies (PDF). Shell companies are registered companies with no significant assets or operations, often without employees or offices. There can be legitimate reasons to set up shell companies, however, they can be used for illegal or unethical practices.

The ease of company registration in the UK has led to widespread press reports of fraudulent company registrations. For example, in late 2023, forty-eight companies registered to Chinese nationals were registered to unconnected residential addresses in one street in Swansea.

Financial crime expert Graham Barrow told the BBC that fraudsters set up multiple fake companies in the UK to either launder money or to obtain bank accounts and take out loans.

Economic Crime and Corporate Transparency Act 2023

The Government passed legislation in 2023 to address these challenges. The Economic Crime and Corporate Transparency Act 2023 (ECCTA) introduced new objectives for the Companies House registrar including to ensure the register is accurate and not misleading, and to prevent companies from carrying out unlawful activities.

A number of these changes came into force on 4 March 2024:

• Companies House were given the power to proactively investigate and query information on the register, and request supporting evidence to support information being filed.
• Companies House’s abilities to share information with law enforcement agencies were enhanced.
• It became an offence for companies not to register an ‘appropriate address’.
• The rules restricting the naming of companies were strengthened.

Companies House have not yet confirmed how they will identify false information, nor whether they will actively monitor filings, or rely on receiving complaints to direct their investigations.

They have stated that they won’t act on all the information they receive, instead prioritising cases which pose the biggest risk to the integrity of the register.

The ECCTA introduced powers for Companies House to require identification and address verification. New directors appointed on or after 18 November 2025 must be verified before their appointment can be registered. They can do so via Companies House or through registered Authorised Corporate Service Providers (ACSPs); authorised agents acting on behalf of Companies House. Existing directors and persons with significant control (PSCs) will be required to verify their identity in line with their company’s next confirmation statement filed after that date, with Companies House implementing a 12-month transition period for this cohort.

Cost of reform

The Government pledged a total of £63 million to support the reform of Companies House between 2022-23 and 2024-25, around £20 million per year. Companies House will also keep the additional funding from the increased fees since 1 May 2024. Despite this, Kathryn Westmore of think-tank Rusi, quoted in the Financial Times [subscription only], has argued that not enough resources are available to effectively reform the system.

In its 2022 impact assessment accompanying the ECCTA, the Government forecast the total cost of the reforms to business to be £289 million. They forecast the costliest individual measure to be the costs of company directors having to understand and undertake identity verification. The Department forecast that the estimated value of the improved accuracy of the register would more than offset the additional costs to business.

Outstanding challenges

Despite the significant reforms to Companies House, financial crime and tax campaigner Dan Neidle argues that not enough has been done to prevent abuse of the regime. The financial crime expert Graham Barrow states in the Financial Times [subscription only] that identity verification will not necessarily prevent financial crime. He points out that banks have long carried out anti-money laundering verification checks, without successfully blocking criminals’ access to the financial system. A July 2025 survey reported by the International Accounting Bulletin revealed that only 28% of UK company directors felt adequately prepared for the forthcoming mandatory identity verification changes under the ECCTA