In late October 2023 the Economic Crime and Transparency Act 2023 ("ECCTA") passed into law. This is not only a major company law reform but also the biggest shake-up in the history of Companies House. For details of, and background to, the introduction of ECCTA please read our full briefing.
Implementation of the measures prescribed under ECCTA will be
staggered and are dependent on
secondary legislation having been implemented. However, Companies
House recently announced
that the measures to be introduced on 4 March 2024 include:
- greater powers for the registrar to check, query or reject
information submitted to Companies House and to request supporting
evidence;
- measures to clean up the register, using data matching to
identify and remove inaccurate information;
- greater control over company names;
- new rules for registered office addresses and a new obligation
for all companies to register an appropriate email address;
- changes to the requirements for registering new companies to
include a new statement by subscribers that the company is being
formed for a lawful purpose. Companies will be required to confirm
in the annual confirmation statement that their future activities
will be lawful; and
- the ability to annotate the register when information appears confusing or misleading; and the registrar's new powers to share information with other government departments and law enforcement agencies.
What can you do now?
Consider taking the following actions:
- review all of your UK group companies' registered office
addresses:
- P.O. Boxes will not be permitted under the new rules; and
- the registered office address must be an "appropriate
address" where someone related to the business will be capable
of taking delivery of documents;
- P.O. Boxes will not be permitted under the new rules; and
- ensure all your UK group companies have a registered email
address (going forward, any changes to a company's email
address will have to be notified to Companies House);
- review all UK group company names to ensure they do not breach
any of the new restrictions;
- review all UK group company registers, records and appointments
at Companies House to ensure that board, secretarial and PSC
compositions are up to date and accurate; and
- start transitioning all UK group companies to software-only accounts filing.
Thinking ahead
Thinking ahead to the new offence of failure to prevent fraud
which will be brought in under ECCTA:
although we do not yet have a clear idea of timing, there are
certain steps you could take now to
make sure you are well prepared. Guidance is expected from the
government setting out the
procedures that relevant organisations can put in place to prevent
persons associated with them
from committing fraud offences before the new offence comes in. As
this guidance is not yet
available, the measures listed below are only suggestions.
- Review existing fraud prevention measures and, where relevant,
incorporate further measures, such as:
- assessment of risks of fraud in the business and review of
existing policies;
- preparation of additional policies and procedures to combat the
risk of fraud;
- training on the new duty and any newly implemented policies and
procedures;
- financial controls;
- robust transactional and third-party diligence
procedures;
- clear and effective fraud audit and monitoring processes;
and
- regular and thorough reviews of internal systems and controls to ensure appropriate measures are maintained.
- assessment of risks of fraud in the business and review of
existing policies;
Note that the application and impact of ECCTA should be considered both at subsidiary or portfolio level and above in respect of fund entities.
Sign up for more updates on what is coming down the track with ECCTA, and what you can do to stay ahead of ECCTA and changes to UK company law.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.