Companies House which is the body and government department that oversees all matters relating to the registration and maintenance of company records is undergoing a period of reform. Companies House maintains and makes available for public viewing a full register of all companies registered in the United Kingdom.
In 2023 the government introduced the Economic Crime and Corporate Transparency Act (ECCT 2023), the act came into force on the 4th March 2024 after which the first changes were implemented, with further changes due to be brought in later in 2024. Below we look at some of these changes and how they will impact limited companies.
Greater powers
The new act gives Companies House more powers to query information and request more information. Companies House can reject a new filing if it believes information is inaccurate or inconsistent. This will include any information regarding the business activity, addresses, officers or persons with significant control.
Companies House will require all queries to be answered and inconsistencies to be resolved. In cases of non-compliance they will have the power to remove information from the register. As well as this Companies House will be required to analyse information held for the purpose of preventing or detecting criminal activity, where suspicions arise they will be obliged to share the information with law enforcement agencies.
Registered email address
From 4th March 2024, all newly registered companies and all companies submitting the annual confirmation statement will be required to provide Companies House with an email address, this email address can then be used by them to communicate with the company. The email address will not be available on the public register.
It is expected by us that in due course Companies House will move away from sending reminders and notifications in the post, and will send all correspondence by email. It is important that company directors ensure emails are actively monitored and communications from Companies House are picked up.
Statement of lawful purpose
In addition to the above, going forwards, the subscribers (shareholders) of the company will be required to confirm they are forming the company for a lawful purpose and that all intended future activities will be lawful.
The purpose of these early changes is to stop fraudulent activity and improve the information held on the register, and also allows Companies House to better serve its stakeholders. Along with the changes Companies House have been given additional powers to impose direct financial penalties in addition to their right to pursue criminal sanctions against companies and directors.
At PayStream we continue to help our clients understand the changes and ensure they are fulfilling all their responsibilities in a complete manner. These changes and new powers bring into focus the need to ensure good compliance, fines and penalties for bad practice or not keeping up with changes can be material and will certainly impact a company in an adverse manner.
The new act will continue to lead the way of reform by Companies House, who as a regulatory body have a mandate to contribute to tackling economic crime and improving transparency. Further changes are expected in 2024 which will include additional checks and due diligence on company directors and shareholders, working with reputable providers and accountants and better financial transparency.
As your accountants we already assist you in matters related to your limited company, we also have a strong understanding of the Companies Act and the new Economic Crime and Corporate Transparency Act as well as we have an existing working relationship with Companies House. So you can rest assured we will continue to keep you informed and stay on the right side of all matters.
