The Economic Crime and Corporate Transparency Bill

The new Economic Crime and Corporate Transparency Act (ECCTA), following on from the Economic Crime (Transparency and Enforcement) Act 2022, received Royal Ascent on 26 October 2023 and became law.

The ECCTA brings in stronger powers to tackle money laundering and other illicit activity to enhance the UK's reputation as a great and safe place to do business. The most significant part of the ECCTA are the monumental reforms to Companies House.The key areas are:

Providing Companies House with more effective investigation and enforcement powers and introducing better cross-checking of data with other public and private sector bodies.
Identity verification for all new and existing registered company directors, People with Significant Control, and those delivering documents to the Registrar.
Enhancing the protection of personal information provided to Companies House to protect individuals from fraud and other harms.
Reforms to prevent the abuse of limited partnerships.
Improving the financial information on the register so that it is more accurate.

These new and enhanced powers are the most significant changes for Companies House since corporate registrations were established in 1844.

While not all the measures, such as identity verification, have been introduced straight away because they need system development and secondary legislation before they can be introduced, a number of changes came into force from March 2024.

What changes have been implemented so far?

From 4 March 2024, the following measures came into force at Companies House:

1. Greater powers to query information and request supporting evidence

Companies House will scrutinise and reject information that seems incorrect or inconsistent with information already on the register and, in some cases, they will be able to remove information.

2. Stronger checks on company names

To help improve the accuracy and quality of data, carry out stronger checks on names that may give a false or misleading impression to the public.

3. Registered office address

All companies must have an appropriate address at all times (i.e. companies will be unable to use a PO Box as their registered office).
Third-party agents are allowed to continue providing their address as a registered office, so long as it meets the "appropriate address" criteria.

4. Registered email address

The address will not be publicly visible but will be used as a means of communication by Companies House.
Companies are responsible for keeping their registered email address up-to-date via the following methods:
New companies - included on the incorporation form.
Existing companies - to be included in the next confirmation statement.
Future updates - change through the “update registered email address” service online.

5. Statement of lawful purpose

The intention of these new statements is to make it clear that all companies on the register, new and existing, have a duty to operate in a lawful way and will be recorded as follows:
Incorporation - subscribers (shareholders) must confirm their intention to operate lawfully when incorporating a company. This will then be re-confirmed each year when filing the confirmation statement.
Confirmation statement - existing companies must confirm their intended future activities are lawful in their upcoming confirmation statements.

6. Annotations

Annotations on the register to let users know about potential issues with the information that’s been supplied Companies House.

7. Clean the register

Remove inaccurate information by using data matching.

8. Share data with other government departments/law agencies

Companies House will be able to proactively share information with law enforcement bodies where they have evidence of anomalous filings or suspicious behaviour.

Changes to Companies House’s fees

From 1 May 2024, Companies House will be increasing their fees to help fund the new measures. Full details can be found here.

If you have any questions or would like further training on this, please contact Chloe Bristow at [javascript protected email address], who heads up our Company Secretarial and Governance team.

The information on this site about legal matters is provided as a general guide only. Although we try to ensure that all of the information on this site is accurate and up to date, this cannot be guaranteed. The information on this site should not be relied upon or construed as constituting legal advice and Howes Percival LLP disclaims liability in relation to its use. You should seek appropriate legal advice before taking or refraining from taking any action.

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