fbpx
Skip to content
Clarke & Son Articles

Companies House Changes Confirmed

Companies House reform places new far-reaching obligations on companies and its officers.  

Companies House is a government body that registers company information in the UK and makes the information available to the public. Scrutiny of Companies House as a vehicle for economic crime is common amongst the Government, businesses, and the public. This scrutiny has called for change, facilitated by The Economic Crime and Corporate Transparency Bill (ECCT Bill).

The ECCT Bill has been passed in the House of Lords and is now in the final stages before being brought into force. The ECCT Bill is a reform package that builds on the Economic Crime (Transparency and Enforcement) Act 2022 and aims to give new powers to Companies House to fight against economic crime and prevent the misuse of corporate entities.

 

What changes can be expected?

The aim of the ECCT Bill is that it will fundamentally change the role and purpose of Companies House to allow it to become an active gatekeeper of company registers rather than a passive recipient.

The key changes are:

  • Identity verification will be introduced. This process will be implemented for all those who register companies or file with Companies House. It will include verification of all pre-existing and future company directors, company secretaries, people with significant control, and all those who file/deliver documents on behalf of these people to the registrar. The identity verification will either be conducted by Companies House directly or via an anti-money laundering authorised corporate service provider. The aim of verification is to decipher between fraudsters who are using the company register for crime and those who are legitimate.
  • The appointment of directors will be void in certain circumstances. For example, if a director is disqualified or subject to asset freeze sanctions.
  • Increased filing requirements will be introduced for small companies to improve financial information on the register and make it more accurate.
  • The ECCT Bill will allow individuals to apply to have certain personal information on the register to be protected to prevent abuse and fraud of personal information on the register.
  • Companies House will be given additional powers to ensure it is a source of reliable data. It will be able to check, remove, or decline information submitted to, or already on the register.
  • The Bill would allow enhanced sharing of the data on the register with law enforcement, government bodies, and the private sector. Active data cross-checking will allow for strengthened enforcement powers to detect unusual filings and suspicious behaviour.

The Bill also introduces changes to Limited Partnerships (LPs) to tackle the misuse of this corporate structure. The measures introduced include tightening the registration requirements of LPs, requiring more information about the partners of LPs which must be submitted by authorised corporate service providers, enabling the registrar to deregister LPs that are dissolved or not carrying out business, requiring LPs to maintain their registered office in the part of the UK that they registered in, and requiring all LPs to submit statements confirming the accuracy of the information about them on the register.

It is essential that companies and their officers are aware that failure to comply with certain requirements such as identity verification will be deemed an offence. Sanctions will also be imposed on those who breach their obligations regarding LPs.

 

Additional changes that will be implemented

  • The ECCT Bill addresses crypto assets and implements a stronger regime to seize/recover crypto assets from criminals due to the anonymity of such assets and the ability to transfer them at speed.
  • Additional changes will be made to the Register of overseas entities. For example, the information required to register an overseas entity has been amended.

 

Concluding remarks

Changes to Companies House and current corporate practice is certain and these changes are likely to be implemented quickly.

The ECCT Bill will change the way companies are set up on Companies House, the amendment of company articles of association, and the way the way directors are appointed. This list is by no means exhaustive, so it essential for directors and Companies House users to be aware of the forthcoming changes and the new obligations placed on them.

 

 

Should you need assistance with the forthcoming changes to Companies House and current corporate practice or with Companies House filings, please contact the Corporate Commercial team via email: mail@clarkeandson.co.uk or call us at 01256 320555.

Feel free to share:

Facebook
Twitter
LinkedIn
Whatsapp

Contact Details

If you have any questions or would like to enquire about one of our services, please fill in the enquiry form below and one of the team will get back to you.