The Economic Crime and Corporate Transparency Act will introduce a number of changes to Companies House over the next few years.
These changes have the power to play a significant role in combating economic crime, fostering economic growth, and ensuring that the UK remains one of the best places in the world to start and grow a business.
Here, we take a quick look at what you need to know about the new measures coming into effect which will generally apply to all entities registered with Companies House.
Improving the quality of data on Companies House registers
From March 2024, Companies House will have increased authority to query information, implement stronger checks on company names, introduce new regulations for registered office addresses, and establish additional lawful purpose statements.
Registered office addresses
Starting 4 March 2024, there will be new rules for registered office addresses, requiring companies to maintain an ‘appropriate address’ at all times as their registered office. An appropriate address is defined as one where:
- Any documents sent to the registered office are anticipated to be noticed by an individual acting on behalf of the company.
- Any documents sent to that address can be officially recorded through an acknowledgment of delivery.
A new identity verification process will be implemented by Companies House to discourage individuals seeking to exploit companies for illegal purposes.
Anyone setting up, running, owning or controlling a company in the UK will need to verify their identity to prove they are who they claim to be.
Changes to accounts
In efforts to modernise and digitise the filing process, there are upcoming changes to the way in which you submit your annual accounts to Companies House.
The process of shifting exclusively to software-based filing for accounts has begun. This shift aims to enhance efficiency and security in company filings while also improving the quality of data on the register.
The recent legislation establishes the groundwork for Companies House to mandate companies to submit accounts in a digital format. To adhere to these modifications, all companies will be required to identify appropriate software solutions before the cessation of web-based and paper filing alternatives.
There will also be changes to small company filing options. Small and micro-entity companies will be obligated to submit their profit and loss accounts. Specific details regarding the necessary inclusions will be outlined in secondary legislation. Additionally, small companies not meeting the criteria for micro entities will be required to file a directors’ report.
Confirmation statement changes
All companies, including dormant and non-trading ones, are required to submit a confirmation statement annually. It confirms the information they hold about the company is up to date.
Even without any changes during the review period, companies must submit a confirmation statement.
It is anticipated that these adjustments will be introduced by 4 March 2024.. However, the introduction of these changes needs secondary legislation so this date is still dependent on parliamentary timetables. It will not be earlier than 4 March 2024.
Changes to Companies House fees
In 2024, there will be an increase in their fees. This adjustment is seen as necessary as their fees will now contribute to covering the expenses associated with the new powers and the comprehensive set of reforms outlined in the Economic Crime and Corporate Transparency Act.
Protecting your information
The Economic Crime and Corporate Transparency Act has introduced measures to prevent the misuse of personal information held in the Companies House register.
One of the objectives is to strike a balance between the requirement for corporate transparency and the recognition that the publication of personal information should occur only when deemed necessary and proportionate.
These measures will be gradually implemented over the next two years through a phased approach.
According to the act, individuals will be able to apply to suppress the following information from historical documents. These include:
- Residential addresses in most instances when shown elsewhere on the register (for example, when used as a registered office address)
- Day of birth for documents registered before 10 October 2015 (only the month and year of birth have been publicly displayed since 10 October 2015)
- Business Occupation
Changes to limited partnerships
Under measures introduced by the Economic Crime and Corporate Transparency Act, limited partnership (LP) information will be more accessible and transparent.
When the measures come into force, LPs must:
- Disclose partners’ names, date of birth, and usual residential address.
- Verify the identity of general partners.
- Provide a registered office within the UK.
- Provide a Standard Industrial Classification (SIC) code.
- File an annual confirmation statement.
Improving transparency of company ownership
Upon the introduction of these measures, companies are required to:
- Register the complete names of individual shareholders or the full names of corporate members and firms in their records.
- Provide a one-time comprehensive shareholder list to facilitate a more user-friendly display of shareholder information by Companies House.
Companies House will:
- Collect and display additional information from companies claiming an exemption from providing details about a person with significant control (PSC), including the reason for the exemption.
- Collect and display the conditions which allow a relevant legal entity (RLE) to be recorded as a PSC.
Please feel free to get in touch for more information on how this will impact you and your business.
Author: Plus Accounting
All content provided on this blog is for informational purposes only. The owner of this blog makes no representations as to the accuracy or completeness of any information on this site or found by following any link on this site.
Date published: 24 January 2024