CDD on directors of companies

IPA Insolvency Practitioner newsletter AML Digest, August 2026

The IPA has had questions raised regarding due diligence on directors of companies. It is noted that ICAEW advice for standard risk cases is that only the main director point of contact needs to be verified.

Remembering that the ICAEW does not just supervise IPs, what is the position on CDD of directors?

Looking at the relevant section on due diligence – Reg 28 MLR17 – directors are listed separately under 28(3)(b)(ii) and Beneficial Owners are provided for under 28(4).

Reg28(3) says that where the customer is a body corporate the following details must be obtained:

(a) the relevant person must obtain and verify:

(i) the name of the body corporate;

(ii) its company number or other registration number;

(iii) the address of its registered office, and if different, its principal place of business;

(b) subject to paragraph (5) [company listed on a regulated market], the relevant person must take reasonable measures to determine and verify:

(i) the law to which the body corporate is subject, and its constitution (whether set out in its articles of association or other governing documents);

(ii) the full names of the board of directors (or if there is no board, the members of the equivalent management body) and the senior persons responsible for the operations of the body corporate.

The restriction at Reg 28(9) on the use of Companies House register for verification does not apply to the directors as it would do for beneficial owners – i.e. you can verify the directors’ names via Companies House, but not the identity of Persons with Significant Control. Clearly if these are the same person, then identity will need to be verified.

IPs should consider issues which may trigger a need for further verification. For example, where there are doubts that the information held at Companies House is unverified; you have concerns over the validity of the names; or names appear on the register that you are unaware of etc. Each case should be considered separately and based on the case risk assessment for the proposed appointment. It is therefore crucial that a clear note is held as part of the due diligence papers that outlines the checks completed and reasons why ID verification was/was not undertaken for directors.

As an example, you may be approached by a director for a potential CVL case. Your checks at Companies House indicate that there are three directors where one of these is the PSC for the company (“PSC director”). You are advised that the second director (“D2”) is the spouse of the PSC director and is not involved in the running of the company. You are advised that the company can pass Board resolutions with two of the directors voting in favour (in this example, PSC Director and the third director (“D3”)

In this instance you would first check the company’s articles etc. to confirm the voting position and in addition to verifying the PSC director, to also do the same for any other person who has/appears to have a senior role within the company (D3). For D2 you verify their name via Companies House to confirm they have successfully completed their identification checks. Your case risk assessment on the file would have a note as part of the overall checks and conclusions.