In October 2023, the Economic Crime and Corporate Transparency Act became law. This Act introduces the biggest change to the way Companies House operates since corporate registrations were established in 1844.
The Government’s stated aim is to give Companies House the power to play a more significant role in tackling economic crime, supporting economic growth and making sure that the UK is one of the best places in the world to start and grow a business.
Implementation of the Act is a huge task and will take several years. Some of the changes will require secondary legislation.
There will be new responsibilities for all new and existing directors, people with significant control (PSCs) and anyone who files on behalf of a company.
Whether you think these changes will achieve their stated aims or are just another example of more unnecessary regulation, if your run a business via a company, there is no avoiding them.
Big change usually involves big cost. How is this change to be paid for? Inevitably, Companies House fees are set to increase, from 1 May 2024. For example, the fee to file an Annual Confirmation Statement will rise to £34, from the current fee of £13.
If you’re thinking of forming a new company or you run an existing company, you should keep an eye on the roll-out of this legislation.
The first changes under the Act are planned to take effect from 4 March 2024. These changes include:
- New rules for registered office addresses.
- A requirement for all companies to supply a registered email address.
- New lawful purpose statements.
- Greater powers for Companies House.
- Enforcement action and sanctions.
Registered office addresses
From 4 March, all companies, at all times, must have what is called an ‘appropriate address’ as their registered office. Such an address is one where:
- any documents sent to the address should come to the attention of a person acting on behalf of the company; and
- any documents sent to the address can be acknowledged as delivered.
The key change here is that a company will no longer be able to use a PO Box as a registered office address.
Companies House will take action against companies that do not have an appropriate registered office address. So, if you currently use a PO Box, you need to act before 4 March.
Failure to provide an appropriate registered address will initially result in Companies House changing the address to a default address held at Companies House. If this happens, a company must provide an appropriate address within 28 days or Companies House may start proceedings to strike the company off the Register.
Registered email address
Under the ECCT Act, all companies will need to supply an email address to Companies House. Companies House will use this email address to communicate with the company. It will not be available to the public.
The address can be a private individual or company email address. And you can use the same address for more than one company. The key is that the address is one which is used by those who run the company in the ordinary course of business, so that any emails from Companies House will be safely received and read.
Existing companies only have to provide this address when they file their next Annual Confirmation Statement, dated from 5 March 2024 onwards. When doing so, you’ll be prompted to provide an address.
For new companies, incorporated from 4 March 2024, an email address will have to be provided as part of the formation process.
Statement to confirm that the company is lawful
All companies must confirm that the intended future activities of the company will be lawful.
This statement will have to be provided each year when filing the Annual Confirmation Statement. You won’t be able to file the ACS without this statement.
This new statement applies to all ACS filings dated from 5 March 2024.
Registrar’s powers
From 4 March 2024, Companies House will have greater powers to query and challenge the information on the Register if appears to be incorrect or inconsistent with the information they hold. In some cases, they will also be able to remove information more quickly, if information is inaccurate, incomplete, false or fraudulent.
There will be stronger checks on company names which may give a false or misleading impression.
Enforcement and sanctions
If a company does not respond to a formal request from Companies House for more information, there will be serious consequences. This is also the case for a company if its registered office is a not an appropriate address. Consequences can include a financial penalty, a note on the company’s (Companies House) public record and prosecution.
This is the first set of changes introduced by the ECCT Act. More are planned in the future. We’ll keep you posted as implementation of the Act proceeds.
If you need help with this or any other accountancy, tax and small business issues, get in touch for a no-obligation discussion – see our Contact Us page for how to reach us.
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