Changes to Companies House
It’s not often that rules and regulations relating to Companies House change. However, we’re about to experience multiple changes, starting in 2024. The reason being that the Economic Crime and Corporate Transparency Act 2023 (ECCTA) received Royal Assent on 26 October 2023. The ECCTA is a key part of the Government’s ongoing legislative strategy to tackle economic and financial crime. The changes to be introduced by the ECCTA are wide ranging and arguably will lead to a new regime for companies, from both an incorporation and administration perspective.
In simple terms, Companies House will be given the power to query any filings, to request further evidence and/or to reject any filings, and to remove material from the register more swiftly. It will also be able to require all information to be filed electronically.
Here’s an overview of the main changes that will come into play:
Enhanced powers for the Registrar
Companies House will no longer act as a largely passive administrator of corporate information. New powers will include the ability to query and reject filings, require additional information to be provided, remove information from the register and proactively share data with regulators and public authorities.
Identity verification
New identity verification requirements will be introduced for all directors and persons with significant control (PSCs) (in both cases for existing and newly appointed) and for all those delivering documents to the Registrar.
Directors
Individuals will be prohibited from acting as a director unless their identity has been verified. Provisions around notification of changes of directors have also been tightened with a new offence introduced.
Registered office and email address
The ECCTA introduces a new requirement to ensure that a registered office is an “appropriate address”. Importantly, all companies will also be required to have a registered email address.
Company names
The ECCTA expands the circumstances where the use of a company name can be prohibited to include things such as names that could be used to facilitate crimes.
Local registers
Companies will no longer be required to maintain local registers of directors or PSCs.
Register of overseas entities
The definition of “registered overseas entity” will be amended in such a way that if an overseas entity fails to respond to any requests for information from the Registrar it would be unable to make a relevant disposition of UK real estate assets.
Limited Partnerships
The ECCTA introduces significant changes to limited partnership legislation aimed at tackling the misuse of limited partnerships through greater transparency.
Criminal Offences
A new criminal offence of “Failure to Prevent Fraud” which will make companies and partnerships liable for failing to stop employees, agents, or others acting on their behalf, for committing fraud for the benefit of the organisation or its customers.
In addition, changes to the basis on which liability is attributed to corporates for economic crimes so that the involvement of a “senior manager” will suffice to convict the company.
Summary
Whilst these changes have been announced, firm dates as to when they will come into play are still waiting to be confirmed. Some changes may take longer than others due to the need for new systems. However, certain changes such as the new criminal offence (Failure to Prevent Fraud) and the changes to corporate criminal liability (I.e. the involvement of a senior manager being sufficient to convict a company) will come into force in early 2024.
As soon as more information is available, we’ll be sure to make you aware. In the meantime, if you have any questions please get in touch.
