29 June 2022
The Companies Registration Office (CRO) will introduce a measure to validate the identity of directors to improve the accuracy and integrity of company information held on the Register of Companies and reduce the risk of identity theft. Salvador Nash and Ronan Rock of our Legal Services team explore the issues below.
The Companies (Corporate Enforcement Authority) Act, 2021 is due to be commenced into law later this year and will introduce a requirement for directors of Irish-registered companies to file details of their personal public service number (PPSN) with the CRO.
The CRO exists to provide members of the public with access to information on companies, their owners, directors, and financial results.
It has a stated policy of not seeking to impose unnecessary administrative burdens on companies and has in recent years sought to modernise and simplify its system for filing documents. Incorporating a company and details of director changes can now be submitted online directly to the CRO without identity validation checks or a requirement for a statutory declaration to be sworn in the presence of a solicitor or notary public.
Notwithstanding the recent filing improvements and greater accessibility afforded by online filing, the CRO has faced criticism for the deficiency of checks it performs on information filed with that office. A series of newspaper investigations identified multiple instances of companies being registered using bogus addresses, director details and, in some cases, individuals being appointed to companies without their permission (resulting in a complaint to the Director of Corporate Enforcement). Such instances highlight that the CRO’s current filing system is open to abuse by facilitating, with relative ease, the formation of companies without adequate verification or validation processes.
Additionally, there is some evidence that CRO hold multiple director profiles for the same individual due to different variants of an individual’s name, residential address or date of birth being used on company filings, perhaps when filings are made by different service providers. This can make it difficult to identify an individual’s current directorships or to track through past directorships to determine the trading status and history of such companies.
Once commenced into law, the legislative changes will require directors to file details of their PPSNs with the CRO when: -
The PPSNs will be used for validation purposes only and will not be available to the public.
The precise date for the introduction of these changes is unknown at present as they will require a reconfiguration of the CRO’s online filing portal to implement.
Once the online filing portal has been reconfigured, directors will be identified on the CRO filing system by reference to their PPSN rather than by reference to their name, address, or date of birth.
Overall, the changes are to be welcomed and it is hoped that they will eliminate the deficiencies in the current filing system, reduce incidents of identity theft and make it more difficult to set up and administer companies using fake or bogus details. The changes should also assist the CRO in enforcing other company law requirements such as enforcing the maximum number of Irish directorships that an individual can hold.
In cases where a director does not have a PPSN, it will be necessary to apply for a filing number.
While precise details of how to obtain a filing number have yet to be announced, it is thought that the process will be similar to the procedure for obtaining a RBO Transaction Number under the Beneficial Ownership of Corporates legislation.
This entails such directors confirming their identity in the presence of a notary abroad and signing a Declaration. The Declaration is then furnished to the CRO who issue a filing number.
While the changes are to be welcomed, there are likely to be significant teething problems along the way. Possible examples include: -
Companies should start the process of compiling details of PPSNs for their directors and conduct a review of director information currently held on CRO records to identify any cases of inconsistencies between the information held on CRO records and the name and details under which the PPSN is registered.
Companies should also establish whether any of their directors should apply for a PPSN or a filing number where any director does not have a PPSN.
If you have any queries about filing director profiles, please contact our team below. We'd be delighted to hear from you.
