New corporate transparency rules for all UK companies

Increased powers given to Companies House – Economic Crime and Corporate Transparency Act 2023 – What it means in practice for UK companies.

The Economic Crime and Corporate Transparency Act 2023 (ECCTA) affects all registered UK companies. It aims to give Companies House a more significant role in the administration of companies registered in the UK – making it a ‘gatekeeper’ of information.

ECCTA also allows Companies House to share information more easily with other government departments and law enforcement agencies, as part of a move to combat economic crime.

The specific provisions of ECCTA are being implemented in stages over the coming months. The first provisions were implemented on 4 March 2024.

This article will explore the key provisions of ECCTA, now in force, and what they mean for UK businesses.

Changes which have taken effect from 4th March 2024

Registered office address

The use of PO Box’s as a registered office address is no longer allowed.

Companies must have an ‘appropriate’ address as their registered office address. This ensures that any documentation sent to the registered office will come to the attention of a person acting on behalf of the company.

It is still possible to use a third-party agent address as the registered office address, so long as the agent is considered appropriate. At Geldards we act as a registered office address for a number of our corporate clients.

It is worth noting that this change applies to all existing registered companies, not just new incorporations. If Companies House identifies an inappropriate address already in use, they will change this to a default address. They will then allow that company 28 days to provide an appropriate address in line with ECCTA. Failure to do so will result in Companies House starting a process to strike off the company.

Registered email address

Every company registered in England and Wales must now provide an appropriate email address. Companies House will use this email address to communicate with the recipient about their company. The address will be used internally by Companies House and will not be made public.

Existing companies will be required to provide an email address when they next file their Confirmation Statement. Companies are also able to update their registered email address via their Webfiling account. Any failure to comply with this requirement will mean an offence is committed by the Company and each of its officers.

Lawful statement

It is now mandatory for all new companies to confirm, in their application for registration, that it is being incorporated for a lawful purpose (hopefully not an issue for most applicants!) A statement must also be given about the company’s planned future activities.

Existing companies will be required to make the above statement when they file their next Confirmation Statement. This statement will be required annually.

Company name checks

Companies House will carry out more diligent checks on any company name that may give a false or misleading impression to the public.

Company names can be rejected if it is intended to facilitate an offence of dishonesty or deception. For example, the proposed name would give a false impression of a connection to an international government or organisation.

Additionally, the registrar can now change a company’s name if they believe it contains computer code.

Enhanced powers for the Registrar

Companies House now have greater powers to query inconsistent information contained on a company’s register. This is to ensure the register is more reliable as a public resource.

In the past Companies House has largely accepted any documents presented by a company for filing, without carrying out further checks. They will now take steps to review the filed information, against that already held on the company’s register.

ECCTA – Looking ahead

During 2024, further parts of ECCTA will be implemented. Each will have an impact on how UK-registered companies interact with Companies House.

Upcoming changes include:

• identity verification requirements for UK company directors, PSC’s, and anyone acting on behalf of companies who file information with Companies House,
• changes to how a company keeps its statutory registers,
• new offences for companies and senior managers if there is a failure to prevent fraud and
• a ban on corporate directors.

While specific dates have not been provided, we expect some, if not all, of the above to be implemented by the end of 2024.

How can Geldards help?

ECCTA is now in force. It has a wide scope and will have an impact on most corporate entities registered in the UK. The gradual implementation of these changes also means that companies will need to continue to manage and update their practices.

At Geldards, we already provide company secretarial services for a number of our UK clients, as well as large international groups who hold UK subsidiary companies. We will be working with these companies to ensure that their UK entities are in compliance with ECCTA.

If your UK-registered company requires any advice on ECCTA and how it applies to your business, then please contact a member of the Geldards corporate team.