27 March 2023
Improving the accuracy and integrity of company information will become the norm according to Salvador Nash of KPMG Law LLP.
That’s because 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.
The Companies (Corporate Enforcement Authority) Act, 2021 will introduce a requirement for directors of Irish-registered companies to file details of their personal public service number (PPSN) with the CRO.
The PPSNs will be used for validation purposes only and will not be available to the public. While the precise date for the introduction of these changes is unknown at present, but it likely to be in the next few months, once the online filing portal has been reconfigured by the CRO, 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.
Even though the CRO has implemented filing improvements and afforded greater accessibility 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. 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.
Once commenced into law, the legislative changes will require directors to file details of their PPSNs with the CRO when: -
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 and 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.
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.
This article first appeared in the Sunday Business Post and is reproduced here with their kind permission.
