How will private equity funds be affected by the new identity verification requirements?

Changes being rolled out this year will make identity verification compulsory for all directors and 'persons with significant control' (PSCs) of UK companies. Similar requirements will also apply to members and PSCs of limited liability partnerships (LLPs) and nominated managing officers of limited partnerships.

The changes will affect private equity funds, both in relation to their own internal structures as well as existing portfolio companies and new investments.

What are the new requirements?

Each of the following will need to verify their identity:

• Directors of UK companies
• Members of UK LLPs
• Individual PSCs and nominated relevant officers (a company director or LLP member) of corporate PSCs
• Nominated managing officers (a company director or LLP member) of corporate general partners of limited partnerships
• Individuals filing information at Companies House

Identity verification can be carried out directly with Companies House, via the GOV.UK One Login service. Alternatively, this can be done via a third-party agent that has registered with Companies House, known as an Authorised Corporate Service Provider (an ACSP).

When will the new requirements apply?

The exact dates are yet to be confirmed but the current timetable is:

From 8 April 2025: individuals can already verify their identity voluntarily in advance of full implementation later this year.

From autumn 2025: directors will need to verify their identity before a new company is incorporated or they are newly appointed to an existing company. Best practice will be for PSCs also to complete their identity verification before incorporation or appointment (although there is a grace period post-appointment within which they can do this before committing an offence). For existing directors and PSCs, the new requirements will apply when the company's next confirmation statement is due following the autumn 2025 implementation date. Members of LLPs will be subject to similar requirements as company directors from this date.

From spring 2026: only an individual who has verified their identity, or an ACSP, will be able to file information at Companies House.

By the end of 2026: corporate general partners of new limited partnerships must nominate a managing officer whose identity has been verified. General partners of existing limited partnerships will have a transitional period of six months in which to provide the managing officer details to Companies House.

What does this mean for fund entities?

The exact requirements will vary depending on the legal form of each entity:

• Fund limited partnership: assuming the fund has either a company or an LLP as its general partner, a managing officer of that general partner will need to verify their identity and be notified to Companies House.
• General partner: if the general partner is a UK company, its directors and PSCs (including a nominated relevant officer of any corporate PSC) will need to verify their identity before the next confirmation statement is due after autumn 2025. If the general partner is a UK LLP, similar requirements will apply to the members and PSCs of that LLP. New directors, PSCs or LLP members will need to verify their identity before they are appointed after autumn 2025.
• Carried interest partner: this is typically a Scottish limited partnership. Like the fund LP, a managing officer of any corporate general partner will need to verify their identity and be notified to Companies House.
• Manager: like the general partner, the requirements will vary depending on whether the manager is a company or an LLP (see General Partner above)
• Nominee: the nominee that holds the fund's investments in shares and loan notes is usually a company so, again, the requirements set out above will apply to its directors and PSCs (see General Partner above).

In addition, anyone who files information at Companies House on behalf of the above entities will also need to verify their identity. This could include a company secretary who files the annual confirmation statement or notifies changes in directors or LLP members; or a member of the finance team who files the annual accounts.

What does this mean for existing UK portfolio companies?

For an existing UK portfolio company, each of the following will need to verify their identity before the company's next confirmation statement is due after autumn 2025:

• all directors, including investor directors, managers, the chair and any NEDs;
• all individual PSCs;
• a relevant officer of any corporate PSC. Typically, this will include the PE fund general partner and the PE fund manager. As noted above, the directors and PSCs of the general partner and manager (or, if they are LLPs, their members), will already be subject to the identity verification requirements; and
• any other person who will file information at Companies House on behalf of the portfolio company, for example a company secretary or portfolio manager.

What does this mean for investments in new UK portfolio companies?

Where a new investment is made after autumn 2025, each of the above should complete their IDV before completion takes place. When the newco stack is incorporated, the first director(s) will need to have verified their identity.

Confirmation that the management team have completed their IDV should be sought early in the transaction due diligence process. Verified individuals will need to share their Companies House personal codes (allocated when they verify their identity) with the transaction team so their appointments can be linked to their verified identities.

What are the consequences of failing to verify?

Anyone who fails to comply with compulsory identity verification requirements will be committing an offence. In addition, any company with an unverified director will also commit an offence – for example, if a manager of a portfolio company fails to verify their identity before the next confirmation statement is due after autumn 2025.

In addition to fines, failure to verify may result in:

• disqualification for unverified directors;
• rejection of incorporations where directors have not been verified; and
• individuals being prohibited from submitting filings at Companies House.

Next steps

• Identify individuals within your organisation that will need to verify their identity
• Nominate a managing officer of any corporate partner of a limited partnership in the fund structure
• Nominate a relevant officer of any corporate PSC of any fund entity or portfolio company
• Ask these people to verify their identity by following our step-by-step guide or contact us for details of an ACSP who can assist with this