The Economic Crime and Corporate Transparency Act received Royal Assent on Thursday 26 October 2023, measures set out in the Act gives new and enhanced powers to improve the quality and reliability of data held at Companies House and new powers to act quickly when individuals report their personal information has been placed on the register without their consent.
NEW Measures include:
- Identity verification will be required for all new and existing registered company directors, people with significant control, and individuals who file on behalf of companies.
- Companies House to be a more active gatekeeper over company incorporation and the custodian of more reliable data.
- Financial information on the register to be more reliable and accurate.
- Companies House to have more effective investigation and enforcement powers – increasing their ability to share relevant information with partners.
- Enhanced protection of individuals from fraud
- Increases to certain fees effective from early 2024
The Act introduces four new objectives for Companies House:
- Ensure anyone required to deliver a document to the registrar does so and they comply with the delivery requirements
- To make certain the information contained in the register is accurate and information has not been omitted
- Ensure records kept by the registrar do not create a false or misleading impression to the public.
- To prevent companies and others from conducting unlawful activities, or facilitating others to conduct unlawful activities.
What happens now?
Although the Bill has received royal assent and is now an Act of Parliament, no immediate action is required, as certain measures in the Act, such as identity verification, will not be introduced straight away. Many of these changes need system development and secondary legislation before they’re introduced.
Early measures are to include:
- New rules for registered office addresses – Registered Office addresses provided by VCS are already in full compliance.
- Requirement for all companies to supply a registered email address – VCS already have systems in place to provide this service for our clients
- Requirement for all companies to confirm they’re forming the company for a lawful purpose when they incorporate. Annually, the company will need to confirm its future activities will be lawful on their confirmation statement – VCS already have systems in place to provide this service for our clients
- Annotations on the register to let users know about potential issues with the information that’s been supplied
- Clean up the register, using data matching to identify and remove inaccurate information.
- Share data with other government departments and law enforcement agencies.
- Greater powers to query, scrutinise and reject information that seems incorrect or inconsistent with information already on the register. Including the ability to remove information in certain circumstances.
- Stronger examination of company name applications
Further measures will include;
- Introduction of the new Authorised Corporate Service Provider (ACSP). Meaning only corporate service providers authorised by the UK Registrar of Companies will be able to deliver documents to Companies House and complete newly introduced identity verification requirements. VCS has already assisted Companies House in trial for the application process and will register as an ACSP when possible.
- The appointment and continuance of Corporate Directors will be limited to certain circumstances
- Requirement for identity verification for all existing and new Directors and persons with significant control (PSC) and anyone submitting filings on behalf of a company. VCS will be able to carry out identity verification on behalf of our clients.
- Additional details on Shareholders and their shareholdings will be required to be held in the register of members and included in the confirmation statement.
- The register of directors, PSC and charges will no longer be required to be held by the Company and will be held centrally by Companies House.
- Companies submitting micro-entity accounts will be required to file a profit and loss account in addition to a balance sheet and small companies will be required to file a balance sheet, a profit and loss account and the director’s report, we have systems in place to provide this service for our clients
The early measures are expected to come into force in early 2024, your account manager at Virtual Company Secretary Limited will advise of the impact on your company and any action you need to take.
For further information, please contact us here.
Further Reading can be found here.
The information above does not in any way constitute advice. Seeking specialist expertise and support is highly recommended for all Company Directors.