The Economic Crime and Corporate Transparency Act, which received royal assent on 26th October 2023, marks the most significant overhaul of Companies House regulations since the inception of corporate registrations in 1844. This sweeping reform is designed to enhance transparency, improve the accuracy of data on the register, and bolster the fight against economic crime. As these changes roll out, businesses must understand the new requirements and the implications they carry.
The Economic Crime and Corporate Transparency Act aims to tackle economic crime and enhance corporate transparency. With its implementation, Companies House will gain new powers to verify identities, query and amend information, and enforce compliance more stringently.
These measures are expected to impact all registered companies in the UK, requiring careful attention to compliance from directors, and those responsible for filing company information.
Key Changes to Be Aware Of
Identity Verification
One of the key changes is the introduction of identity verification for all new and existing registered directors, persons with significant control (PSCs), and individuals who file on behalf of companies. This measure is intended to prevent fraudulent activities and ensure that only verified individuals can hold significant positions within companies.
For businesses, this means an added layer of due diligence when appointing new directors or PSCs, and the need to verify the identities of existing ones.
Registered Email Address
Since 4th March 2024, companies are required to provide a registered email address as part of their confirmation statements. This requirement enhances communication efficiency and ensures that Companies House can promptly contact companies for compliance and informational purposes. Businesses must ensure that this email address is monitored regularly to avoid missing important communications.
Confirmation Statement Changes
In addition to the registered email address, confirmation statements must now include a statement confirming that the intended future activities of the company will be lawful. This change reinforces the commitment to lawful business practices and requires companies to review and affirm the legality of their planned operations annually.
Registered Office Requirements
New rules stipulate that the registered office address must be appropriate, meaning it should be an address where any correspondence sent to the company is expected to reach a company director or someone responsible for the company’s affairs. This measure aims to prevent the use of inappropriate addresses and ensures that important communications are received and acted upon promptly.
Enhanced Enforcement Powers for Companies House
Companies House will now have greater enforcement powers, including the ability to query information submitted to the register and annotate or correct information believed to be incorrect. This increased scrutiny ensures that the information on the register is accurate and reliable, thereby enhancing the overall integrity of corporate data.
Filing of Accounts
In the future, profit and loss account information will likely need to be submitted to Companies House with the possibility of it being made available to the public. However, there has yet to be any legislation on this – watch this space for more information!
Implications for Businesses
The reforms introduced by the Economic Crime and Corporate Transparency Act carry significant implications for businesses. The requirement for identity verification means that companies will need to implement more stringent vetting processes for directors and PSCs. The changes to confirmation statements and registered office requirements necessitate greater diligence in maintaining accurate and compliant company records.
The enhanced powers granted to Companies House for querying and correcting information highlight the importance of ensuring that all submitted data is accurate and up-to-date. Companies will need to be proactive in reviewing and updating their records to avoid potential penalties or enforcement actions.
The new filing requirements for small companies mean that financial transparency will become increasingly important. Businesses must be prepared to disclose more detailed financial information, which could have implications for their competitive positioning.
As these extensive reforms come into effect, businesses must stay informed and compliant with the new regulations. At D V Marlow & Co, we are committed to supporting our clients through these changes. Whether you need assistance with identity verification, updating your registered office address, or ensuring your confirmation statements and accounts meet the new requirements, our friendly team is here to help. Our fully compliant registered office services are available at competitive rates, meaning you can rest assured that your business will be compliant without the high price tag.
Contact us today to discuss how we can support your business in adapting to these significant regulatory changes. Book a discovery call with us and we can help guide you through the process and necessary changes:
