Companies House Reforms – how will the changes will affect you?
The ECCT (Economic Crime and Corporate Transparency Act) is part of the government’s response to the need to tackle economic crime in the UK and received Royal Assent on October 26th 2023. The ECCT includes provisions related to crypto assets and new intelligence gathering powers for law enforcement amongst other things. But for SME companies, the most significant change will be to the role and powers of Companies House. Under the ECCT Companies House will be given significant extra powers which will directly affect how all individuals and companies interact with them.
These changes include an identity verification regime, changes to Companies House filings, changes to the type of accounts filed for small companies and micro-entities and enhanced powers for Companies House to check, remove and reject information. We are working through these proposed changes and will update you further once more details become available.
It is expected that there will be time between the ECCT receiving Royal Assent and coming into force to allow for implementing secondary legislation to be passed, as well as necessary operational changes made to Companies House systems.
Companies House have now set up a dedicated website covering the implications of the reforms which you can view here view here
The main changes that will come into effect are:
Registration of a company email address
During 2024 (provisionally from March onwards) all companies will be required (as part of their Confirmation Statement CS01 filing, or on incorporation) to register an email address with Companies House.
The email address will not be on the public records and will be used for communications from Companies House.
If we already provide statutory compliance services to your company, further communications will be sent to you directly in due course. Clients who take care of their own statutory work will be responsible for registering an email address – if you require further assistance, please contact statutory.department@charter-house.net.
More broadly, if you are using your own registered office address, you can no longer use a PO Box and you must ensure any documents delivered to the address will come to your attention and can be acknowledged as delivered.
New ID verification regime to be introduced
One key reform is that all directors and people with significant control (PSCs) will need to prove their identity to Companies House. This change is designed to make it more difficult for criminals to set up shell companies. All directors and PSCs will need to provide Companies House with proof of their identity, such as a passport or driving licence.
Once registered through the IDV process you will be issued a verification code linking all of your appointments at Companies House. With this code, Charterhouse (Accountants) Limited, acting as a ‘Authorised Corporate Service Provider’ can then make filings as usual on your company’s behalf.
If you fail to comply with the IDV process you, the company you are a director of, and all other directors of that company will be committing an offence.
It is envisaged there will only be a very small window granted for anyone required to comply with the IDV process and it is therefore important to stay informed of the implementation of these reforms. We will continue to monitor the progress of this Bill and distribute updates as and when further information becomes available.
Timeframes for these significant changes are less certain here and we’ll pass on more information as soon as it is available.
In preparation, we will be undertaking further AML(Anti-money Laundering)/KYC (Know your client) checks where information is not currently held – so our Compliance Team may be in touch.
Promoting the Integrity of the Register
Companies House will be able to challenge inconsistent and incomplete information filed with it. Companies House no longer must accept a document merely if it is “properly delivered”, even if it is inconsistent with the current register. Companies House can refuse to accept and register a document.
Companies House will be given new powers to investigate and take action against non-compliance with the existing requirements and these reforms. This could include fines, prosecutions, and de-registration.
There will be new transparency requirements for the first confirmation statement filed after implementation of ECCT
Statement to confirm the activities of a company are lawful
During 2024 (provisionally from March onwards) all companies will be required (as part of their Confirmation Statement CS01 filing, or on incorporation) to confirm that their intended future activities are lawful.
Companies who take care of their own statutory work will be responsible for registering the statement as part of their own CS01 filing.
Company Registers
- All UK companies must maintain their own Register of Members.
- Companies to record the full names of all company shareholders in their registers.
- Other statutory registers no longer required to be maintained by UK companies.
- There will be a new requirement for companies to maintain an appropriate email address.
- Requirement for companies to maintain an appropriate registered office address.
Company Formation
There will be additional new requirements to be met before incorporation can be processed.
Accounts
Reforms to simplify the filing of statutory accounts meaning much greater financial transparency.
Companies House fees
Companies House have indicated that all of their fees will increase in 2024. No figures have been confirmed yet. To find out what these costs are and whether they would be included in our fees please contact us.
If you have already outsourced your company secretarial function to us, you will not need to worry, we will ensure all changes are implemented and this is for your information only.
If you would like to discuss outsourcing your company secretarial function to Charterhouse, this will mean all legal and governance issues are managed by our experienced team, please contact the head of the team Julie Terry.