Imagine hiring new directors for your organisation without conducting proper director checks then discovering that they’re currently disqualified by Companies House. This would waste your time and could potentially damage your company’s reputation.
What are Directorship Checks
Directorship checks, or director checks, refer to the process of investigating and verifying information related to company directors. These checks are typically conducted to assess the suitability, integrity, and financial stability of individuals holding directorship positions.
In the UK, the requirement for director checks became more formalised with the introduction of the Companies Act 2006, which came into force on October 1, 2007. This legislation established more rigorous standards for the appointment and conduct of company directors, including the need for companies to maintain up-to-date records of directors, their addresses, and other personal information. As part of this framework, it became essential for businesses to conduct checks on potential directors to ensure they meet the legal criteria and have not been disqualified from serving as a director.
The Companies House database, which is the official register of companies in the UK, has been in existence since the Companies Act 1844, although it has undergone numerous changes and updates over the years. The current iteration of the Companies House database, as we know it today, has evolved through various reforms, with significant improvements in accessibility and digital functionality occurring in the early 2000s as part of the UK government’s drive towards digitisation. The Companies Act 2006 further enhanced the database by requiring more detailed information about directors and ensuring greater transparency for stakeholders.
Director checks are also conducted as part of due diligence processes when engaging in business partnerships, investments, or mergers and acquisitions. It helps ensure that potential business partners or directors have a satisfactory track record, reducing the risk of entering into partnerships with individuals who may be involved in fraudulent activities or have a history of misconduct.
How to Check Directorship of a Person
The directorship check investigates both current and past directorships and highlights whether your candidate has any previous disqualifications or is currently barred from being a director.
What to Know About Director Checks
Companies House: Companies House is the official registrar of companies in the UK. It maintains a public database that contains information about registered companies and their directors. Director checks often involve accessing this database to verify details such as the director’s name, date of appointment, resignation history, and current directorships.
Director Disqualification: The Insolvency Service in the UK maintains a register of directors who have been disqualified from acting as directors. This register, known as the Disqualified Directors Register, includes information about individuals who have been banned from holding directorship positions due to misconduct, fraud, or other disqualifying factors. Checking this register can help identify any director with a history of disqualification.
Companies Act 2006: The Companies Act 2006 imposes certain legal obligations on directors in the UK. Director checks may involve reviewing compliance with these obligations, such as the submission of annual accounts, filing of confirmation statements, and adherence to director responsibilities outlined in the Act.
What Do Employers See in a Background Check UK
The information in director checks includes: dates of appointment, previous companies, and details of any disqualifications.
Here’s what else you can assess:
Financial Stability: Director checks may also include assessing the financial stability of a director or their associated companies. This can involve examining financial statements, credit reports, and other relevant financial records to determine the director’s financial position and evaluate any potential risks associated with their involvement in a company.
Professional Conduct: In some cases, director checks may involve investigating professional conduct and reputational aspects of a director. This can include examining any regulatory actions, legal disputes, or adverse media coverage associated with the director.
Legal Considerations: It’s essential to conduct director checks in compliance with relevant laws and regulations, including data protection and privacy laws. Personal information obtained during the checks must be handled securely and used only for legitimate purposes.
Director checks in the UK serve as an important tool for assessing the credibility, trustworthiness, and competence of individuals holding directorship positions. By conducting thorough checks, companies and individuals can make informed decisions and mitigate potential risks associated with their business relationships.
Get Leading Director Checks UK
Certn’s UK-based experts have been a trusted provider of background checks and regulatory compliance expertise for over 29 years. Our directorship searches can be carried out against UK Companies House, as well as other corporate registers in other countries, where such information is readily available. Additionally, a directorship check can be used for employment verification purposes. For example, if your candidate was self-employed with their own limited company, conducting a directorship check could help to confirm the dates of their employment.
With our quick turnaround times combined with the simplicity of our online system, you can hire more swiftly and with the complete assurance that you’re employing the most suitable candidate for the job.
Click here to request a quote for a director check or a customised background screening program from one of our experts.
