The Impact on Businesses of New Investigative Powers granted to Companies House

 The ECCTA has equipped Companies House with enhanced enforcement capabilities to uphold corporate compliance standards across the UK. A new update from Companies House confirms that the latest stage for the implementation of the ECCTA will see Companies House using greater powers; these include imposing fines for late filings, civil and criminal proceedings for severe breaches, and liaising with third party services to address economic crime more effectively, as detailed by the recently published Companies House strategic intelligence assessment.

At the advent of the Act, the then-Home Secretary, Suella Braverman, in her address to Parliament, insisted that the introduction of the ECCTA would work to provide Companies House “with more effective investigation and enforcement powers and introducing better cross-checking of data with other public and private sector bodies”.  The aim of this is to help to curtail money laundering, fraud and other forms of economic crime, which in turn would contribute to the success of the economy.

Under the reforms proposed by the ECCTA, Companies House has been granted authority to impose substantial financial penalties for companies failing to meet filing deadlines or provide accurate data, as established within section 104 of the ECCTA. More serious non-compliance cases may result in civil or criminal actions, impacting directors through potential disqualification, under section 31 of the ECCTA. The powers granted to Companies House may also impact business continuity, where multiple breaches have occurred.

With these new regulations, companies face heightened expectations for accurate, timely filings, with responsibility placed upon company directors, people with significant control, and those filing on behalf of a company, the aim of which is to mitigate the scope for fraud through companies. For companies undergoing structural changes, it is, crucial that those filing information onto Companies House are vigilant in ensuring data entered is accurate and up to date. To find out more about how Companies House will enforce these new powers, please click here.

In order to best secure the newly empowered Companies House, the government have committed to ensuring that it is user-friendly and centralised. Going forward, Companies House access will be added to the existing list of online government services, hosted under the same GOV.UK roof, preventing the need for multiple login entries.

How you can prepare for the Future

For companies across all sectors, the powers granted to Companies House reiterate the importance of transparency and accuracy of information uploaded. By engaging with corporate legal advisors, it can help minimise penalties and protect your business. Companies should consider seeking legal guidance to adapt effectively to these changes, in order to avoid any potential penalties, or disruptions that may threaten business continuity.