Companies House is implementing sweeping reforms this March that aim to clamp down on financial crime and improve corporate transparency.
These changes, part of the Economic Crime and Corporate Transparency Act 2023, represent the biggest overhaul of Companies House in its 180-year history. The Act received Royal Assent on 26th October 2023.
Business Minister Kevin Hollinrake said:
These reforms will remove the smoke and mirrors around companies hiding behind false identities, provide further protection to the public from companies fraudulently using their addresses, and deliver better data to support business and lending decisions across the economy, enhancing the UK’s reputation as a great and safe place to do business.
In this guide, we look at the initial changes which take effect on 4th March 2024 and how they impact limited companies and their owners.
Enhanced powers to query and remove company data
- Companies House will have stronger powers to investigate and remove potentially misleading or incorrect company data. This includes the power to add notes to a company’s entry where information seems confusing or questionable.
- Quick take-downs of clearly fraudulent information will be possible, preventing instances of ‘passing off’ – where a company name is created with the sole purpose of impersonating another company’s identity.
Mandatory ID checks for company officers
- New and existing companies must ensure directors and People with Significant Control (PSCs) pass an identity check.
- The check can be carried out via Companies House or through an authorised intermediary like an accountant, aka an Authorised Corporate Service Provider (ACSP).
- These enhanced identity verification checks are set to be introduced later in 2024, with transitional arrangements in place in the meantime.
Registered office address must be ‘appropriate’
From 4th March, all limited companies need an “appropriate” registered office address that is not just a PO Box. As per Government guidance:
- Mail sent to the address should reasonably come to the attention of someone acting for the company.
- There should be proof of delivery, where necessary, for example, signed-for post.
Accountants and other agents can still offer a registered address service if their address meets the conditions listed above.
Restrictions on company names
The Act places restrictions on using company names that are intended to facilitate crime, contain computer code, or imply a connection with a foreign government.
A new statement of lawful purpose
- When setting up a company, subscribers must state they are forming it for a lawful purpose.
- Existing companies should provide this confirmation on their next confirmation statement submission.
Mandatory registered email address
- All companies must provide a registered email address to receive future Companies House correspondence.
- New companies must provide this from 4th March onwards, while current ones can submit it in their next confirmation statement.
- Company officers can update their registered email address by logging into their Companies House account.
- Not maintaining this email address is now considered an offence.
Remove sensitive information from pre-2015 records
- Company searches currently display old documents with directors’ personal details, including home addresses, business occupations, dates of birth, and even signatures.
- You can now apply to suppress this sensitive information.
Transparency of ownership
To improve transparency, companies must from 4th March:
- List the full names of any individual shareholders in their statutory registers
- Fully detail corporate members and nominee firms
- Provide Companies House with a complete list of shareholders to provide transparency of ownership.
These are just the first steps. What happens next?
While significant, these March changes are just the initial phase of reforms under the Act.
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Future changes include:
- Increased Companies House fees – incorporating the rising costs of new compliance and enforcement.
- Mandatory digital filing for most companies. This means that paper filing will finally be consigned to history.
- Simplified company accounts – ceasing the option to file abridged reports in favour of basic profit/loss statements.
- Digital filing of company accounts will become mandatory – phased in over the next 2 to 3 years.
Useful further reading
Here are some links to official commentary on these changes:
Summary of the initial changes on the Companies House site.
The official Changes to Company Law microsite.