The first phase of the reforms to UK Companies House made by the Economic Crime and Corporate Transparency Act 2023 (ECCTA) went live on 4 March 2024. The reforms broaden the objectives and powers of Companies House, transforming it from what we knew as a largely passive recorder of the information provided to it, into a gatekeeper of company creation and an active scrutiniser of information.
Separately, Companies House have confirmed that a range of increases to their fees will take effect from 1 May 2024.
The ECCTA contains a wide range of measures to tackle economic crime and improve corporate transparency. Parts of Act deal with the wider aspects of economic crime, including a new offence of failure to prevent fraud. Part 1 however is focused principally on Companies House and UK corporates.
The key changes in Part 1 of ECCTA introduced on 4 March include greater powers, enabling the Registrar to:
- query, reject and remove information that seems incorrect or inconsistent with information already on the register;
- undertake stronger checks on company names;
- annotate the public register to let users know about potential issues with the information that has been supplied; and
- share data with partners, such as law enforcement agencies and regulatory bodies.
Part 1 of the ECCTA also includes new rules, including requirements for:
- corporate entities to supply an appropriate registered email address and to have an appropriate registered office address. Businesses will no longer be able to use a PO Box as their registered office address; and
- those forming a company, to confirm they are doing so for a lawful purpose when they incorporate. Every year, a company (or LLP) will need to confirm via their confirmation statement that their future activities will be lawful.
Enhanced objectives now require Companies House to promote and maintain the integrity of the registers it maintains. To support these objectives the new legislation enables Companies House with greater powers to reject a new filing if it appears inconsistent with information held by Companies House or request additional information to satisfy a query that Companies House has about information provided to it. This will include information which it already has on the register.
We will see Companies House remove non-compliant material from its registers and it has a new obligation to analyse information held by it for the purpose of preventing or detecting crime and new powers to share information with law enforcement agencies and other public authorities.
Registered Email Address
Email Although the ECCTA requires all UK companies to provide a registered email address to Companies House, this will not be made available to the public. From the 5 March 2024, we saw a requirement for all existing companies to provide them with a registered email address when they file their next confirmation statement. The email address must be one where, in the ordinary course of events, emails would be expected to come to the attention of a person acting for the company. You should therefore register an email address which is actively monitored so that any communication from Companies House is picked up and will be dealt with expeditiously.
Registered office address
ECCTA now requires all UK companies to have their registered office at an appropriate location. Although this can be a third-party service provider, this does however mean a location where, in the ordinary course of events, documents can be expected to come to the attention of someone acting for the company and where delivery can be recorded by obtaining an acknowledgement of delivery. A company can no longer use a PO Box as its registered address and for some companies, this may mean that they need to move their registered office address.
Companies House has the power to require a company to change its registered office if it is not an appropriate address.
As well as these changes, we have seen the introduction of new restrictions on company names as well as some tightening of the rules relating to the disqualification of directors.
Whilst there is no firm timetable for the further stages of change, one of the most radical changes that Part 1 of ECCTA makes is the requirement for directors, people with significant control and those delivering information to Companies House to verify their identities. The introduction of this particular reforms, will require significant development to Companies House’s systems and other implementation work.
Other changes in Part 1 of ECCTA which will be implemented in due course include:
- the abolition of the requirement for companies to keep their own registers of directors, directors’ residential addresses, secretaries and people with significant control;
- some changes around membership information which companies must supply to Companies House;
- enhanced rights for individuals to have personal information suppressed from public view to prevent the abuse of personal information;
- steps to prevent a new director acting in that capacity where their appointment has not been notified to Companies House within specific timescales; and
- some changes to the filing requirements for annual accounts. These will also be copied across to UK limited liability partnerships as appropriate.
Additionally, various wide-ranging changes to limited partnership law contained in Part 2 of ECCTA remain to be implemented. These no doubt aim to modernise the law governing UK limited partnerships and tackle their misuse by implementing more stringent registration requirements, increasing transparency and obliging limited partnerships to maintain a connection with the UK.
Companies should consider now if they need to take any action at this stage to ensure compliance with the provisions that are now in force, for example registering an email address and ensuring that their registered office address is appropriate.
If you have any queries about this article, please contact Allison Thompson on 0191 2267878.
