Company Law – Changes to Companies House requirements to be aware of

GEPP

24 April 2024

By Jemma Bennett

The first set of changes under the Economic Crime and Corporate Transparency Act were introduced on 4 March 2024. The act gives Companies House the power to play a more significant role in tackling economic crime and supporting economic growth. Overtime, the measures will lead to improved transparency and more accurate and trusted information on the Companies House Register.

The changes have brought in new responsibilities for:

  • All new and existing company directors.
  • People with significant control of a company (PSCs).
  • Anyone who files on behalf of a company.

The measures include:

  1. More reliable and accurate financial information on the register.
  2. Introducing identity verification for all new and existing registered company directors, people with significant control (PSCs), and those who file on behalf of companies.
  3. Broadening powers to become a more active gatekeeper over company creation and more reliable data.
  4. Providing Companies House with more effective enforcement powers, and increasing our ability to share relevant information with partners.
  5. Enhancing the protection of personal information to protect individuals from fraud and other harm.

The changes are sought to improve the quality of the data on the register. This means that the registrar’s objectives are:

  • To ensure that anyone who is required to deliver a document to the registrar does so.
  • To ensure information contained in the 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 public.
  • To prevent companies and others from carrying out unlawful activities or facilitating the carrying out by others of unlawful activities.

What some of these changes mean for you

Registered office addresses

The registered office must be at an appropriate address. An address is an ‘appropriate address’ if, in the ordinary course of events:

  • A document addressed to the company, and delivered there by hand or by post, would be expected to come to the attention of a person acting on behalf of the company.
  • The delivery of documents there is capable of being recorded by obtaining an acknowledgement of delivery.

These changes mean you are not able to use a PO Box as your registered office address.

Statement of lawful purpose

As a new requirement, when you register or ‘incorporate’ a company, the subscribers to the company need to confirm they’re forming the company for a lawful purpose. A company will also need to confirm its intended future activities are lawful on their annual confirmation statement.

The Registrar’s powers

The Registrar will have greater powers to query and challenge information that appears to be incorrect or inconsistent with information that they hold. There will be serious consequences if a company does not respond to a formal request from Companies House for more information which could include:

  • A financial penalty.
  • An annotation on the company’s record.
  • A prosecution.
  • If the registered address is not an appropriate address Companies House will change it to a default address, held at Companies House.

Confirmation Statement Changes

Companies must file a confirmation statement even if there have not been any changes during the review period. Under the act, all new companies need to provide a registered email address when they incorporate from 4 March 2024. Existing companies need to give a registered email address when they file their next confirmation statement, with a statement date from 5 March 2024 onwards.

All companies need to confirm that the intended future activities of the company will be lawful and this will need to be confirmed every year on the confirmation statement.

Identity Verification

For new companies, all directors and people with significant control (PSCs) will need to complete identity verification.

For existing companies, all directors (or equivalent) and PSCs will have a transition period to verify their identity with Companies House.

Anyone acting on behalf of a company will also need to verify their identity before they can file information with Companies House.

Changes to accounts

As part of the journey to modernise and digitise the filing routes, the way accounts are filed at Companies House are changing and this will be done by filing software only. The move to filing accounts by software only will be phased in over the next 2 to 3 years.

Changes to limited partnerships

LPs will need to file their information through an authorised agent (also known as an Authorised Corporate Service Provider) that’s registered with Companies House. This is to make sure the data is trustworthy and fit for purpose.

The new legislation generally applies to all entities registered with Companies House including:

  • Private limited companies.
  • Public limited companies (PLCs).
  • Limited liability companies (LLPs).
  • Limited partnerships (LPs).
  • Community interest companies (CICs).
  • Oversea companies.

The legislation will also apply to anyone who files on behalf of clients such as, accountant and company formation agents.

It is hoped that the changes will allow more enforcement powers for Companies House, and new powers to share data with law enforcement agencies and other government departments.