On the 4^th March 2024, there were changes to Companies House- that being under the Economic Crime and Corporate Transparency Act. This is the biggest change to Companies House since corporate registrations were established in 1844.

Companies House are now playing a more significant role in tackling economic crime and supporting economic growth. The intention is to provide improved transparency and therefore more accurate information on company registers.

The new responsibilities will affect company directors, people with significant control of a company and anyone who files on behalf of a company- therefore it is important to be aware of these changes.

Key Reforms Under the Act

1. Identity Verification: All company directors, persons with significant control (PSCs), and individuals filing on behalf of companies are now required to verify their identities. This measure aims to prevent the use of fabricated names and enhance the accuracy of the information on the register. Existing companies have a 12-month period to comply with this requirement
2. Registered Email Address: Every company must now provide a registered email address to Companies House. This address will not be publicly disclosed but will serve as a primary channel for official communications. New companies must supply this upon incorporation, while existing companies are required to provide it when filing their next confirmation statement after 5 March 2024.
3. Statement of Lawful Purpose: Upon incorporation, shareholders must confirm that the company is being formed for lawful purposes. Additionally, companies need to affirm that their intended future activities are lawful in their confirmation statements. This initiative underscores the commitment to ensuring all entities operate within legal boundaries.
4. Enhanced Powers for Companies House: The Act grants Companies House the authority to query and, if necessary, reject information that appears erroneous or suspicious. This proactive approach is designed to improve the integrity of the register and deter fraudulent activities.
5. Filing Requirements for Small Companies: Small companies and micro-entities are now mandated to prepare and file a profit and loss account as part of their annual accounts. This change aims to increase financial transparency and provide a clearer picture of a company’s financial health.
6. Fee Adjustments: To support the expanded functions and enforcement capabilities of Companies House, fees for certain services have been revised. For instance, the fee for filing a confirmation statement online increased from £13 to £34 as of 1 May 2024.

Implications for Businesses

These reforms necessitate that companies across the UK and Northern Ireland promptly review and update their compliance practices. Ensuring timely identity verification, maintaining accurate records, and adhering to the new filing requirements are critical steps to avoid potential penalties. Businesses are encouraged to familiarise themselves with the detailed provisions of the Act and seek professional advice to navigate the changes effectively.

The overarching goal of these reforms is to foster a more transparent and secure business environment, deterring illicit activities and enhancing trust in the UK’s corporate landscape.

If you have any further queries arising from this, please do not hesitate to contact anyone from our corporate team at Millar McCall Wylie.