Changes to UK Companies House: Economic Crime and Corporate Transparency Act 2023

Introduction:

On October 26, 2023, a momentous event unfolded in the United Kingdom's corporate landscape with the royal assent granted to the Economic Crime and Corporate Transparency Act. This legislation introduces the most significant changes to Companies House since the establishment of corporate registrations in 1844. The Act not only empowers Companies House to play a more substantial role in combating economic crime but also positions the UK as a prime destination for business growth. This blog explores the key measures, responsibilities, and changes ushered in by this transformative legislation.

A Historical Shift:

The Economic Crime and Corporate Transparency Act represents a historical shift, granting Companies House unprecedented powers to fortify its position as a guardian against economic crime. This legislative landmark seeks to strike a balance between transparency and the protection of personal information, aiming to create a business environment where trust and integrity are paramount.

Key Measures and Responsibilities:

1. Identity Verification:

• All new and existing registered company directors, individuals with significant control (PSCs), and those filing on behalf of companies will be required to undergo identity verification. This move is pivotal in deterring the misuse of companies for illegal purposes.

1. Enhanced Powers for Companies House:

• Companies House will now act as a more active gatekeeper in overseeing company creation and ensuring the reliability of data. This includes stronger checks on company names and the introduction of lawful purpose statements.

1. Quality of Data Improvement:

• From March 4, 2024, Companies House will possess greater powers to query information, implement stronger checks on company names, and establish new rules for registered office addresses, contributing to improved data accuracy.

1. Changes to Accounts Filing:

• A phased transition to filing accounts by software only will be initiated, ensuring a more efficient and secure filing process. Small and micro-entity companies will need to file profit and loss accounts, with the option to file 'abridged' accounts being removed.

1. Confirmation Statement Changes:

• The confirmation statement process undergoes changes, including the necessity for a registered email address and a statement confirming the company's lawful activities. These changes are expected to be implemented from March 4, 2024.

1. Companies House Fees Increase:

• Fees for services provided by Companies House will increase in 2024 to account for new powers and broader reforms. This ensures the sustainability of operations within the framework of the Economic Crime and Corporate Transparency Act.

1. Protection of Personal Information:

• The Act introduces measures to prevent abuse of personal information on the Companies House register. Individuals will have the option to suppress certain details from historical documents and apply for protection from public view in cases of personal risk.

Conclusion:

The Economic Crime and Corporate Transparency Act heralds a new era in corporate governance, reinforcing the UK's commitment to transparency, integrity, and economic growth. As these measures take effect, businesses, directors, and stakeholders are urged to stay informed and adapt to the changing landscape. The Act is a testament to the UK's dedication to creating a business environment that not only attracts investment but also ensures the highest standards of accountability and reliability in corporate records.