What is it?
The Economic Crime and Corporate Transparency Bill has been given Royal Assent and will be enacted into UK law in stages, over the coming months. This legislation will fundamentally change the role of Companies House as the Registrar of Companies and introduces a considerable number of changes which companies will need to be aware of.
The bill aims to tackle the rising levels of corporate crime and the use of UK registered entities to facilitate illegitimate activities. The hope is that by introducing tighter controls on incorporation and more stringent filing requirements; those wishing to use the UK business structure for illegitimate reasons will be deterred from doing so, thus boosting confidence in the UK structure and improving the integrity of the Companies House register.
Who is it for?
UK registered private and public companies and limited liability partnerships, and other changes in relation to limited partnerships.
The reforms also include changes relating to Directors and Persons with Significant Control (PSC’s) and providers of Corporate Services such as Accountants and Solicitors.
How does it work?
The changes set to be implemented include:
- ID Verification for current directors of UK registered companies; and for all new directors before appointment (or incorporation) – to be done either via a service provider or directly with Companies House via a newly established portal.
- ID Verification for current PSC’s of UK registered companies; and for all new PSC’s as well.
There are some differences between the verification requirements for directors and PSC's.
- Changes to the types of accounts that small and micro-entities can file to Companies House.
- Changes to the requirements around keeping Statutory Registers.
- Introduction of tighter controls over the registration of company names.
- Changes to rules surrounding the appointment of Corporate Directors.
- Introduction of a registered email address for companies.
- Introduction of increased powers for the Registrar to check, question, analyse and remove information submitted to Companies House.
- Increased powers for the Register to proactively share information with other specified government bodies.
- Introduction of new powers to suppress sensitive information from the register.
Each of these topics will be covered in more detail in further briefings and will be uploaded to our “Latest Briefings” page in due course, so do please take the time to check here for further updates.
These changes are likely to take some time to implement and therefore it is expected that they will be introduced via secondary legislation, throughout 2024 and 2025. Nevertheless, it is important for companies to be aware of the scale of the reforms, so they can prepare appropriately to ensure they remain compliant with the law.
What should I do next?
At the moment, there is no specified timeline for when these reforms will be enacted into Law, and therefore further information will be made available on our website in due course. In the meantime, there are some things that companies can do, in anticipation of these changes.
Firstly, all companies that are required to submit a confirmation statement should ensure that their members list contains the full legal name of each member, as it appears on their identity document. Any entries which contain preferred or shortened versions of legal names should be updated (e.g. Tom instead of Thomas). Once the legislation is enacted, the first Confirmation Statement submitted after the enactment date will need to include a members list containing the full legal name of each of the members, so it is recommended that companies undertake this exercise as early as possible to minimise the work required at the time of their CS01 submission.
Secondly, companies should start to think about the email address they will use as the “Registered Email” which Companies House will use primarily for correspondence. While this can be a personal email of a director, it is not recommended. Any change to this registered email will need to be notified to Companies House, so the use of a personal email could cause communication problems should that individual leave the company. Therefore we would recommend the use of an administrative email, rather than a personal email.
Finally, companies may consider communicating with directors and PSC’s that new requirements regarding the verification of ID will be coming into force. More information regarding the requirements for directors and PSC’s separately, and the other changes coming in, will be posted shortly to our briefings page, so please do check back for updates.
If you have any queries regarding the above or have any other questions, please do not hesitate to contact Charlotte Leslie at 01865 261119 or email.
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