In an effort to disrupt economic crime, support economic growth and increase the reliability of the information held in the public register at Companies House, the government has passed the Economic Crime and Corporate Transparency Act 2023 (ECCTA).
The act will introduce unprecedented requirements on companies, including limited liability partnerships and other kinds of corporate entities registered at Companies House, their owners and their directors to verify themselves and ensure the accuracy of the information they provide to Companies House.
The first phase of implementation which came into force on March 4, gave Companies House the power to query, reject, alter and annotate the information it holds about companies on the register.
Prior to the ECCTA, Companies House was required to accept information if it was “properly delivered” and had limited ability to question information that was suspicious or filings that were submitted erroneously or fraudulently.
The new powers mark a landmark shift in the role Companies House will play in regulating the register and influencing the wider business environment.
Companies, directors and owners should be aware that the changes will not only deal with the role of Companies House, but they will also introduce new requirements on companies and LLPs. These will include:
- a requirement for all companies and LLPs to supply a registered email address to Companies House;
- the prohibition on companies and LLPs to use a PO Box address as their registered office address; and
- a requirement for all companies and LLPs to confirm to Companies House on incorporation that they are being formed for a lawful purpose and that their intended future activities will be lawful.
These requirements may seem relatively light touch, but they are only the first steps towards full implementation of the ECCTA, which will radically change the way companies, directors and owners interact and interface with Companies House.
Timeframes to comply with these requirements are expected to be revealed in the near future. Below, I discuss the best ways companies can prepare for this shift.
Are you comfortable with the information the registrar holds about your company?
The ECCTA provides that Companies House can query, reject, alter and annotate the information it holds about companies on the register, but it is not yet clear what this process will look like.
To what extent can Companies House query the information you have filed? How far back on your record can they query? Will Companies House give you the chance to make the necessary changes before it does so itself? How will the annotations appear on your company profile?
These questions are yet to be answered, and the hope is that secondary legislation is passed and government guidance is published to enable companies and their advisers to be better prepared to meet these requirements.
While we wait for such legislation and guidance, the best thing companies, directors and owners can do is satisfy themselves of the accuracy of the information they have provided to Companies House.
Unless your company has the internal resources to review its information at Companies House, it is strongly recommended that businesses consult with their professional advisers who will be able to perform a thorough health check, suggesting any filings, or amendments to existing filings, that should be made.
The changes should be viewed as the perfect time for a spring clean, where you can lift your proverbial carpets and sweep up the lingering dust and dander that had long been ignored.
