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New powers for Companies House

| Duncan & Toplis | 10 May 2024

On 4 March 2024 Companies House announced that the first measures under the Economic Crime and Corporate Transparency Act 2023 (ECCTA) had been brought into force.

The reforms give Companies House new and enhanced powers to improve the quality and reliability of its data and tackle misuse of the Companies Register, which over time, will help to fight economic crime and provide greater transparency across the UK business environment.

Confirmation statements

Every company, including dormant and non-trading companies, must file a confirmation statement at least once every year even if there have not been any changes during the review period.

Under the new Act, all companies need to provide a registered email address – this won’t appear in public, it will only be used by Companies House. As of 4 March 2024, new companies will need to provide a registered email address when they incorporate and existing companies will need to provide one when they file their next confirmation statement with a statement date of 5 March 2024 onwards.

All companies will also need to confirm that the intended future activities of the company will be lawful. This will need to be confirmed annually on the confirmation statement. A company will not be able to file a confirmation statement without this statement.

Change company names

Under the new Act, Companies House has the power to challenge and change company names. Companies House can reject an application to register a name if they have reason to believe:

  • the name is intended to facilitate fraud
  • the name is comprised of or contains a computer code
  • the name is likely to give the false impression the company is connected to a foreign government or an international organisation whose members include two or more countries or territories (or their governments)

Companies House can now direct companies to change their name and if they fail to comply within 28 days, it can change the company name to the registered company number. Companies House also has the power to suppress a name from the register while a company responds to a direction to change its name.

Failure to comply with the rules is classed as a criminal offence if a company does not respond to a direction to change their company name within 28 days or if a company continues using a company name which Companies House has directed to be changed. To maintain confidence in the corporate registry, persistent, repeated and wilful non-compliance are likely to result in prosecution and each director of a company is liable.

Registrars’ new powers

Companies House now has greater powers to query information on the register and request supporting evidence. These powers are strongly linked to the new registrars’ objectives introduced by the Act, which are:

  1. To ensure that anyone who is required to deliver a document to the registrar does so (and that the requirements for proper delivery are complied with).
  2. To ensure information contained in the register is accurate and that the register contains everything it ought to contain.
  3. To ensure that records kept by the registrar do not create a false or misleading impression to members of the public.
  4. To prevent companies and others from carrying out unlawful activities, or facilitating others to carry out unlawful activities.

Companies House is now able to correct or query information before or after it’s accepted and published on the register, query information already on the register before these measures came into effect, and request supporting evidence after the information has been published.

It is important that a company responds quickly to requests for information from Companies House. If a case is escalated to formal query, then there are 14 days to respond to Companies House. A lack of response is classed as a criminal offence and the consequences could be a financial penalty or prosecution.

Annual Confirmation Statement changes

Registered email address

Under the act, all companies need to provide a registered email address. Companies House will use this email address to communicate with the company – it will not be available to the public.

New companies need to give a registered email address when they incorporate, from 4 March 2024.

Existing companies need to give a registered email address when they file their next confirmation statement, with a statement date from 5 March 2024 onwards.

Statement to confirm the company is lawful

All companies need to confirm that the intended future activities of the company will be lawful.

You need to confirm this every year on the confirmation statement. You will not be able to file a confirmation statement without this statement.

This applies to all confirmation statements with a statement date from 5 March 2024 onwards.

We welcome these changes that are helping to support the UK’s status as one of the leading business locations in the world by increasing confidence and trust in its corporate transparency whilst continuing to improve the safeguarding of personal information. This includes implementing ways to suppress historic personal information on the Companies House register and protect personal information from public view where individuals are at risk of harm or violence.

These changes are part of the first tranche in a series of reforms contained in the Act. Further measures expected later this year include:

  • a new system of identity verification for directors, members of LLPs and persons with significant control;
  • a new regime of centralised registers under which companies will no longer be required to maintain a register of directors, a register of directors’ residential addresses, a register of secretaries, and a register of PSCs.

Companies House have already rolled out a new charging structure – further detail here.

To find out more about the new measures, please get in touch with our team of experts.

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