Changes to Companies House – The Economic Crime and Corporate Transparency Act 2023

During the course of 2023, the UK and Scotland have developed new legislation that aims to increase transparency in businesses. This is expected to come into force in 2024.

The Economic Crime and Corporate Transparency Act 2023

The Economic Crime and Corporate Transparency Act 2023 (ECCTA) aims to improve transparency and reduce economic crime by setting out new obligations for companies, LLPs and limited partnerships compelling them to supply more information to Companies House. These are:

  1. ID and Email Requirements

New and existing directors and Persons of Significant Control will now have to provide Companies House with verified ID. Businesses will also have to provide a registered email address, and add this email address to their Company Books.

  1. Company Incorporation

Incorporating a company is set to become more challenging, with new requirements for companies to confirm they have a lawful purpose. The potential directors will also have to confirm they haven’t been disqualified and, as mentioned above, have their ID verified. The fee and length of time for incorporation are also likely to increase.

  1. New Offence (Failure to Prevent Fraud)

A new criminal offence has been created, which will render companies over a certain size criminally liable if they are found to have failed to prevent fraud. Ignorance is not an acceptable defence; businesses are expected to review policies and staff training to ensure they are compliant.

  1. Changes to Limited Partnerships

A number of changes will be imposed on Limited Partnerships, including the requirement to provide to Companies House increased information and ID from partners, and a registered email address. Limited Partnerships will also have to have a registered office.

HMRC have been granted increased powers to demand audited accounts from a Limited Partnership at any time, and a new category has been added to the disqualification list (Disqualified General Partner). A disqualified UK director will no longer be able to be a partner of a Limited Partnership.

How should businesses prepare?

Businesses should start now to gather any additional information needed. The Companies House ID verification system is likely to roll out over the year 2024; however, in preparation for this, the business’ Company Books should be updated with email addresses and the shareholders’ full names and addresses.

Businesses should start the process of notifying their directors and Persons of Significant Control about the new ID verification requirements.

As well as the above, businesses should consider taking advice on a fraud prevention policy and other procedures including training for staff, and implement these throughout the business to ensure compliance.

 

If you want to discuss any of the issues raised in this Blog, Jennifer Simpson from our corporate team would be happy to help and you can contact her on jms@bbmsolicitors.co.uk or speak to her on 01955 604188