Get ready for the changes to company law

On the 26th of October 2023, the Economic Crime and Corporate Transparency Act (ECCTA) became law.

The changes will be introduced in phases over the next few years, with the first set of changes being introduced on 4 March 2024.

The aim of the ECCTA is to introduce changes to Companies House which will play a significant role in tackling economic crime and supporting economic growth. It is hoped that the measures will lead to improved transparency and more accurate information on company registers.

Who does the ECCTA apply to?

• all new and existing company directors,
• people with significant control of a company (PSCs),
• anyone who files on behalf of a company.

ECCTA objectives & new powers

Under the ECCTA, the Companies House registrar will have new objectives:

• to ensure that any person required to deliver documents to the registrar does so and that the requirements for proper delivery are complied with;
• to ensure that information contained on the Companies House register is accurate and that the register contains everything it ought to contain;
• to ensure that records kept by the registrar do not create a false or misleading impression to members of the public; and
• to prevent companies and others from carrying out unlawful activities or facilitating the carrying out by others of unlawful activities.

The registrar will have new powers to:

• reject information that seems incorrect or remove it from the register entirely;
• challenge any inconsistency between new and existing information on the register; and
• contact companies to help issues before any further action is taken.

What happens from 4 March 2024?

• New rules for registered office addresses, which mean companies must always have an appropriate address as their registered office.
• A requirement for all companies to provide Companies House with a registered e-mail address.
• Any companies incorporated from 4 March will need the subscribers to confirm that the company is being formed for a lawful purpose.
• The registrar will have greater powers to query and challenge information that appears to be incorrect or inconsistent with information held.
• There will be stronger checks on company names which may give a false or misleading impression to the public.
• The registrar will be able to use annotations on the register to let users know about potential issues with the information that's been supplied.
• The registrar will be able to take steps to clean up the register, using data matching, to identify and remove inaccurate information.

What changes are in the future?

• On 1 May 2024, Companies House filing fees are increasing.
• Introduction of compulsory identity verification for anyone setting up, running, owning, or controlling a company in the UK.
• Streamlining the accounts filing options for small and micro entity companies and transitioning towards filing accounts by software only.
• Changes to make limited partnership information more accessible and transparent.

If you have any queries or require any support in relation to the upcoming changes, please contact any of our corporate team who would be happy to discuss how to prepare for these changes.