Companies House update: Economic Crime and Corporate Transparency Act 2023
On 4th March 2024, Companies House is set to implement a first set of new regulatory measures intended to address economic crime and improve corporate transparency. This follows the implementation of the Economic Crime and Corporate Transparency Act 2023 (the Act) last October.
The Companies Act 2006 has been amended by the Act to bolster the way in which companies registered in England and Wales file information that is recorded at Companies House. It is important for all companies, intermediaries, and stakeholders to have notice of these new measures, as non-compliance will lead to an offence being committed.
In summary, Companies House has been given greater powers to validate information, implement identity verification, and investigate discrepancies. The Companies House Blog has summarised the initial changes to be introduced on 4th March 2024 as follows:
- greater powers to query information and request supporting evidence;
- stronger checks on company names;
- new rules for registered office addresses;
- a requirement for all companies to supply a registered email address;
- a requirement for all companies to confirm they’re forming the company for a lawful purpose when they incorporate, and to confirm its intended future activities will be lawful on their confirmation statement;
- the ability to annotate the register when information appears confusing or misleading;
- taking steps to clean up the register, using data matching to identify and remove inaccurate information;
- sharing data with other government departments and law enforcement agencies.
4th March 2024 changes:
Registered Office Address
Each company will need to ensure that the registered office address recorded on the public register at Companies House will need to be an ‘appropriate address’. An appropriate address is one where:
- any documents sent to the registered office should be expected to come to the attention of a person acting on behalf of the company;
- any documents sent to that address can be recorded by an acknowledgement of delivery.
This new measure prevents the use of PO Box addresses being used as a registered office address, but companies will still be able to use a third-party address, such as an accountants’ address, as long as the address satisfies the above criteria.
A PO Box address that is being used as a registered office address must be changed before 4 March 2024. Companies House will have the power to strike off companies that do not comply with the new ‘appropriate address’ requirement.
Registered Email Address
Another significant change is the requirement for all companies to provide Companies House with a registered email address. It is important to highlight that the email address provided will not be visible on the public register but, will allow Companies House to ensure communications are received by all companies.
It is advisable for companies to start considering the most appropriate email address to register, as this change will be implemented from 4 March 2024. For existing companies, the registered email address will be expected to be provided when filing the next confirmation statement due after this date.
Future changes:
Identity Verification
The most significant change that is on the horizon for companies will be the introduction of identity verification for all new and existing company directors and persons with significant control (PSC’s). This new requirement aims to tackle the existence of fraudulent companies and the use of fictitious officers or PSC’s.
Directors and PSC’s of new companies will need to verify their identity before incorporation of a company, and there will be a transitional period for all directors and PSC’s of existing companies to complete the identity verification. A company, director or PSC that fails to comply with these requirements will commit a criminal offence. The identity verification will also cover any individuals that file documentation at Companies House.
The verification procedure can be completed in two ways:
- directly through Companies House;
- through authorised agents known as Authorised Corporate Services Providers (ACSP’s).
ACSP’s are individuals or organisations that are registered with a regulatory body for anti-money laundering (AML) purposes, such as solicitors and accountants.
We recommend all directors and PSC’s ensure they have a valid primary identity document, such as a passport or driving licence, in readiness for these regulatory measures coming into force.
Summary
Further guidance is expected to be produced by Companies House as these new measures are implemented. In the meantime, it is advisable for companies, directors, PSC’s, and any other individuals affected by these changes to familiarise themselves with the new measures and to take note of when further measures will be introduced. It is also very important to ensure all current company records are complete, accurate and up to date at Companies House to ensure compliance does not become burdensome.
If you have any questions or concerns in respect of the above, please do not hesitate to contact any member of our corporate team here at Rogers and Norton, who will be delighted to assist. If you require legal advice and you’d like to book an appointment, please contact us on 01603 666001 or email enquiries@rogers-norton.co.uk
*This article is provided for general information purposes only and does not constitute legal or any other professional advice.