Economic Crime and Corporate Transparency Act 2023 series: changes from March 2024

In its blog, Companies House has indicated that a number of changes will be introduced in March 2024 by the Economic Crime and Corporate Transparency Act 2023.

The Act will provide the Registrar of Companies with a set of new overarching statutory objectives to improve the accuracy and quality of the data held by Companies House.

Alongside this, the Registrar will be given enhanced powers to meet those objectives and these initial changes being introduced are the first steps towards positioning Companies House as a pillar of reliable corporate information. The initial changes, expected to come into force on 4th March, include:

  • Greater powers to query information. Companies House will be able to scrutinise and reject information that seems incorrect or inconsistent with information already on the register. In some cases, Companies House will be able to remove information.
  • Stronger checks on company names which may give a false or misleading impression to the public or where a name could be used to facilitate certain crimes.
  • New rules for registered office addresses which will mean all companies must always have an appropriate address. Companies will not be able to use a PO Box as their registered office address.
  • A requirement for all subscribers to confirm that they are forming the company for a lawful purpose when they incorporate.
  • Changes to annual confirmation statements to include a new confirmation that the future activities of the company will be lawful.
  • A requirement for all companies to supply a registered email address.
  • A power for the Registrar to annotate the register to let users know about potential issues with the information that has been supplied to it.

These initial changes are likely to result in an increase in the volume of queries and rejections issued by the Registrar. Failure to respond to a formal request for more information could result in financial penalties, an annotation on the company’s record or prosecution.

Companies House has also announced that it will be taking steps to clean up the register, using data matching to identify and remove inaccurate information. Companies House will start data sharing with other government departments and law enforcement agencies to cross-check information. It remains to be seen what types of discrepancies will be picked up, but we anticipate that a key focus will be the register of persons with significant control.

Companies House has said it will be increasing its fees from 1st May. The fees are set on a cost recovery basis which means the fees must cover the cost of the services it delivers, so these increases will be reflective of the investment in, and delivery of, its greater powers of scrutiny, etc.. Clients with large group structures may want to consider the rationalisation of UK registered companies within the group. If you require further information on how Shoosmiths can assist with group reorganisation and simplification, please contact Simon Procter, Rebecca Holden or Maria Foanta.

Disclaimer

This information is for educational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given. © Shoosmiths LLP 2024.

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