Changes to UK company law: a big moment for Companies House
The Economic Crime and Corporate Transparency Bill is now an Act (law) which will provide Robust New Laws To Fight Corruption, Money Laundering And Fraud.
Companies House will have increased powers to undertake more rigorous investigation and enforcement powers to share data on companies and individuals with law enforcement agencies and other government departments and affects all UK limited companies, corporate structures and limited partnerships; including dormant and non-trading businesses, plus community Interest groups. Dissolved companies will remain on the register for 20 years.
Previously, Companies House could not remove false information.
Costly and lengthy court cases with the companies suppling the information was the only option.
Companies House did not verify the accuracy of the information filed.
Current Information held in the online information insane, address, date of birth of Directors, Filing History of the Company, (audits, incorporation of a company by a Directer, appointment dates and termination of appointment dates of a Director, Newspaper Reports (ie when dissolving a company), charges, outstanding charges, if currently active or dissolved, Liquidators Reports and if reported to the Disqualified Directors Board.
The new act is one of the most significant moments for Companies House in their long history.
The landmark transparency reforms are intended to crack down on criminals who hide their identities and launder the proceeds of crime, fraud, scams, fraudulent trading, false statements by company directors, cheating the public revenue for example.
Companies House will receive enhanced abilities to verify the identities of company directors, remove fraudulent organisations from the company register and share information with criminal investigation agencies
Companies with repeated financial issues will be highlighted, making it easier for banks and the general public to form an opinion.
They have been working on approaching a pivotal moment in the history of Companies House.
This legislation will fundamentally change their role and their purpose and will give the the powers they need to play a more significant role in tackling economic crime.
Over time, they’ll become an active gatekeeper of the data on their registers rather than a passive recipient, and they’ll have the tools to go further to prevent the misuse of corporate entities.
They’ll be able to operate in a different way in the future, they know that economic crime threatens everyone, from global businesses to individuals.
This shift will not happen overnight, but you’ll start to see a visible difference in the way they respond to suspected fraud and other suspicious activities when they have their new powers.
They’re keen to do all they can to play their part in tackling global economic crime and improving corporate transparency to prevent a wide range of illegality, including illicit finance and money laundering.
They know that they are used by criminals to facilitate economic crime and to launder the proceeds of crime.
Recent years have seen concerns grow about the misuse of UK corporate entities, the filing of false information at Companies House, and the use of innocent people’s information on the companies register to commit fraud and other acts of harm.
Since 2015, almost all of this information has been accessible online, free and without delay and was accessed over 6.5 billion times last year.
Since 2015, almost all of this information has been accessible online, free and without delay and was accessed over 6.5 billion times last year.
However, there are cases of false information being filed, often by accident but sometimes deliberately, and only being identified some time later.
The government does not intend to change the current 20-year retention period of dissolved company records
- 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 others to carry out unlawful activities.
The Economic Crime and Corporate Transparency Act received royal assent on 26 October 2023.
The way you file your confirmation statement is changing, including the introduction of a registered email address.
They expect these measures to come into force in early 2024.
The new measures broaden and give increased new powers to Companies House to ensure that more reliable and accurate financial information is kept on the company register, reflecting the latest advancements in digital technology and increase their ability to share relevant information with partners and law enforcement agencies.
Companies House will have increased powers to undertake more rigorous investigation and enforcement powers to share data on companies and individuals with law enforcement agencies and other government departments, the changes affect all UK limited companies, corporate structures, limited partnerships, including non – trading or dormant companies and community interest companies.
In recent years, Companies House has strengthened its partnership with law enforcement agencies.
Companies House will build on this activity, exploring further ways in which it can collaborate with its law enforcement partners.
Underpinning these efforts will be stronger systems and processes to routinely cross-check data on the register.
It will be more difficult for fraudulent information to be placed on the register; in cases where it is, then processes will be in place for it to be quickly identified and passed to enforcement agencies.
The government intends to introduce new powers to require companies to demonstrate they are entitled to use an address as their registered office.
A new operating model will be needed to deliver these new responsibilities. It will involve new digital technologies and process capabilities, and new skills requirements
- In instances where criminal activity is suspected, Companies House works with law enforcement agencies to further investigate and prosecute offenders.
- Greater powers to query information. This means they’ll be able to scrutinise and reject information that seems incorrect or inconsistent with information already on the register. In some cases, we’ll be able to remove information.
- Introducing identity verification for all new and existing registered company directors, people with significant control (PSCs), and those who file on behalf of companies
- New rules for registered office addresses which will mean all companies must have an appropriate address at all times. Companies will not be able to use a PO Box as their registered office address.
- Broadening their powers to become a more active gatekeeper over company creation and more reliable data
- A requirement for all companies to confirm they’re forming the company for a lawful purpose when they incorporate. Every year, the company will need to confirm that its future activities will be lawful on their confirmation statement.
- More reliable and accurate financial information on the register, which reflects the latest advancements in digital technology and enables better business decisions
- Providing Companies House with more effective enforcement powers, and increasing our ability to share relevant information with partners
- Enhancing the protection of personal information to protect individuals from fraud and other harms
The Economic Crime and Corporate Transparency Bill was given Royal Assent on Thursday 26 October and is now an Act (law).
The Economic Crime and Corporate Transparency Act introduces world-leading powers which will allow UK authorities to proactively target organised criminals and others seeking to abuse the UK’s open economy.
Companies House will receive enhanced abilities to verify the identities of company directors, remove fraudulent organisations from the company register and share information with criminal investigation agencies.
Once the powers come into force, the agency will take immediate steps to improve the quality of information on the company register.
Invalid registered office addresses, such as those used fraudulently to set up companies, will be removed.
Verification checks will assess the identities of people setting up and managing companies, stopping criminals hiding behind false names or registering companies with fictional characters. This will help prevent fraudulent appointments and avoid people involved in money laundering hiding behind false names.
Changes to public beneficial ownership registers will also close loopholes that allow corrupt actors to use opaque companies to move and hide money.
It will additionally provide businesses with greater clarity on who they are working with, while allowing civil society organisations to expose corrupt actors, and for the public to increase their trust in governments.
- Prevent organised criminals, fraudsters, kleptocrats and terrorists from using companies to abuse the UK’s open economy
- Strengthen the UK’s broader response to economic crime
- Support enterprise by enabling Companies House to deliver a better service.
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