One of the key aims of the Economic Crime and Corporate Transparency Act is to improve the accuracy and quality of the data on our registers, to help tackle economic crime and drive confidence in the UK economy.
The act will introduce new statutory objectives for the Registrar of Companies which they must promote when performing their functions. The act will also provide the registrar with a suite of new and enhanced powers, to enable them to meet their objectives.
The registrar’s objectives are:
- to ensure that anyone who is required to deliver a document to the registrar does so (and that the requirements for proper delivery are complied with)
- 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 the public
- to prevent companies and others from carrying out unlawful activities or facilitating the carrying out by others of unlawful activities
These objectives also apply to the Registrar of Companies for Scotland and the Registrar of Companies for Northern Ireland.
We’re aiming to introduce some of these changes on 4 March 2024. The introduction of these changes needs secondary legislation so this date is still dependent on parliamentary timetables. It will not be earlier than 4 March 2024.
What’s changing and what this may mean for you
Registered office addresses
From 4 March 2024, there’ll be new rules for registered office addresses which mean companies must, at all times, have an ‘appropriate address’ as their registered office.
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 the obtaining of an acknowledgement of delivery
These changes mean you will not be able to use a PO Box as your registered office address in the future. We will take action against companies that do not have an appropriate registered office address.
Statement of lawful purpose
There’ll be a new requirement when you register or ‘incorporate’ a company from 4 March 2024. The subscribers to the company will 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.
From 4 March 2024, the registrar will have greater powers to query and challenge information that appears to be incorrect or inconsistent with information we hold. In some cases, we’ll also be able to remove information more quickly, if that information is inaccurate, incomplete, false or fraudulent.
There’ll be stronger checks on company names which may give a false or misleading impression to the public. This will help us improve the accuracy and quality of the data we hold and help to tackle the misuse of company names.
We’ll use annotations on the register to let users know about potential issues with the information that’s been supplied to us. We’ll also be taking steps to clean up the register, using data matching to identify and remove inaccurate information.
We’ll also start introducing a new identity verification process in 2024.
Enforcement and sanctions
There’ll be serious consequences if a company does not respond to a formal request from Companies House for more information. This could include:
- a financial penalty
- an annotation on the company’s record
There could also be serious consequences for a company if their registered office is not an appropriate address.
If we’re satisfied a company’s registered office is not appropriate, we’ll change it to a default address, held at Companies House. If a company’s registered office is moved to the default address, they must provide an appropriate address with evidence of proprietary ownership within 28 days, or we could start the process to strike the company off the register.