The Economic Crime and Corporate Transparency Act: UK Company Law is Changing
Published byColin Millar
The new Economic Crime and Corporate Transparency Act has become law. It will change UK company law in a number of significant ways and is intended to reform the role of Companies House and improve transparency over UK companies. Companies House will become a more active regulator with enhanced powers. The reforms are being introduced in stages.
March 2024
Registered Office Addresses
Companies will be required to have an ‘appropriate address for their registered office where i) delivery of documents is capable of being recorded; and ii) a document sent to the address is likely to come to the attention of someone acting on behalf of the company. PO Boxes will therefore no longer be permitted as registered office addresses.
Registered Email Addresses
Companies will need to maintain an appropriate registered email address ie an email address where correspondence from Companies House is likely to come to the attention of someone acting on behalf of the company.
New Powers of Companies House
Companies House will have new, more robust powers to query and reject information, make further requests and enquiries for information from individuals, remove inaccurate material from the register and share data with other government departments (including law enforcement agencies).
Lawful purpose statements
New companies will be required to make a positive and affirmative statement that they are incorporating the company for lawful purposes and, along with existing companies, will be required to re-confirm this statement in each yearly confirmation statement given to Companies House.
Beyond March 2024
Identity Verification
This is perhaps the most significant of all the changes. All directors and persons with significant control in both new and existing companies will be required to verify their identity with Companies House, either personally or through use of an authorised corporate service provider (eg a firm of solicitors). An offence will be committed if an individual does not comply and, in the case of directors, should they act prior to having verified their identity. Companies House will introduce an online verification service. An individual will be expected to provide a form of photographic ID such as a passport/driving licence.
Accounts
Small companies will be required to provide their profit and loss account in all circumstances and small companies will also need to file a directors’ report (unless they are a micro-company). Companies claiming an exemption from an audit will require directors to make a statement as to the company’s qualification for the exemption. Companies will no longer have an option to provide abridged accounts.
For further information, Companies House have established the new ‘Changes to UK Company Law’ website (accessible at https://changestoukcompanylaw.campaign.gov.uk/), providing useful details on all the upcoming changes which will be updated throughout the course of implementation of the Act.
We can help you navigate your way through the changes. Please contact us for further advice and support on how these changes might affect your company. Email CorporatePtnrs@wjm.co.uk
The information contained in this newsletter is for general guidance only and represents our understanding of relevant law and practice as at January 2024. Wright, Johnston & Mackenzie LLP cannot be held responsible for any action taken or not taken in reliance upon the contents. Specific advice should be taken on any individual matter. Transmissions to or from our email system and calls to or from our offices may be monitored and/or recorded for regulatory purposes. Authorised and regulated by the Financial Conduct Authority. Registered office: 319 St Vincent Street, Glasgow, G2 5RZ. A limited liability partnership registered in Scotland, number SO 300336.
