Millions of company directors who have yet to complete compulsory anti-fraud checks face fines or prosecution unless they complete a ‘clunky’ registration system within weeks.

Latest figures show less than half have finished the process, which has been dogged by delays and technical glitches.

An Institute of Directors (IoD) survey found a third of its members reported ‘challenges’ completing the Companies House checks due to ‘websites crashing and synchronisation failures’.

Last week saw the first prosecutions for failure to comply with the new rules – which were delayed by year because of bugs in the computer system. 

They apply to 8.5million company directors, 6.1million persons with significant control of a business and 170,000 limited liability partnership members.

But only 7.3million of these checks had been completed by the end of June, according to the most recent data available.

Leading economist Prof Doug McWilliams, founder of the Centre for Economics and Business Research, said: ‘It’s a very clunky system and has particular difficulty recognising faces.

‘I’m not surprised many people have failed to verify.’

McWilliams spent three days trying to scan his passport using the One Login system – before taking it to a post office, which also failed in the process.

As a result, he said he was giving up being a trustee of a community charity that provides meals on wheels for elderly people, reverting to a lesser role.

‘If I can’t do it, then God knows how many more are going to be caught. A lot of charity trustees are quite elderly,’ he said, fearing the impact on small charities ‘providing important services’.

Another company boss called One Login ‘flaky at best, full of glitches’, adding: ‘If you could design the worst piece of software for the process, this is it.’

Mandatory director checks – designed to eliminate fake or fraudulent directorships – were introduced under the Economic Crime and Corporate Transparency Act 2023, in the biggest reform of Companies House since its inception in 1844.

In March, The Mail on Sunday revealed third-party agencies were charging up to £840 for ‘executive’ support to complete the glitch-ridden process.

Ilaria Lavalle Miller at the IoD said its figures showed there was still ‘significant progress to be made before the deadline’

adding: ‘Given the large number of directors and people with significant control required to verify their identity, it is vital the process is straightforward and accessible.’

Directors have been required to complete verification before any new filing to Companies House since November. But all directors must have completed the checks by November 18 this year.

The looming deadline comes as Companies House was forced to close its online filing service after a glitch allowed the public to see directors’ personal details that could expose them to fraud.

Companies House said it would not be releasing further statistics until the end of next month.

The agency insists verification ‘will provide more assurance about who is setting up, running, owning and controlling companies’. It had ‘no power to regulate’ third parties, advising directors to ‘conduct their own due diligence’.

An extra 100 staff had been recruited to help the process, while written reminders were being sent to directors and ‘tailored support’ offered for non-commercial organisations, it added.

The first prosecutions took place last week of directors not complying with verification.

Jill White and Marc Dillon, both 62, of White (Reading Properties), and Modinat Banjo, 50, of J Isogony Apparel, were fined and told to pay costs at City of London Magistrates’ Court on Wednesday in a case that was brought by the Insolvency Service.