Companies House changes: explained

Earlier this year, the UK business landscape underwent a significant change with the implementation of the Economic Crime and Corporate Transparency Act (“the Act”).

Companies House changes: at a glance

The new legislation has a number of objectives, which are all an attempt at combating economic crime, while facilitating economic growth.

The changes affect the way in which Companies House operates and the powers that it has, and business owners and their advisors must be aware of how the changes impact them and their clients.

The changes include the following:

• Companies House now has greater powers to query information and request supporting evidence when documents or information is supplied to them.
• There will be stronger checks on company names for both current and proposed companies and limited liability partnerships.
• Directors and persons with significant control (“PSCs”) and anyone delivering documents to Companies House will be required to undertake an identity verification process (further details below).
• Companies must have an appropriate registered office address at all times – they will no longer be able to use a PO box as their registered office address. This email address won’t be available to the public, but Companies House will use the email address to communicate with the recipient about the company, therefore it is important that the address is regularly used and maintained.
• A requirement for all companies to supply a registered email address (further details below).
• A requirement for new companies to confirm that they’re being formed for a lawful purpose, and companies, on each confirmation statement, will need to confirm its intended future activities will be lawful. If businesses fail to do this, it will render the confirmation statement ineligible for submission.
• Companies House has been given greater powers to tackle and remove from the register of companies factually inaccurate information.
• Companies House can now share data with other government departments and law enforcement agencies.
• The use of centralised registers. The Act abolishes the requirement for companies to keep their own register of directors, register of directors’ residential addresses, register of secretaries, and register of PSCs. Instead, all relevant information will be provided to and maintained by Companies House. Therefore, ensuring that filings are made in a timely and accurate manner will be extremely important.
• Companies will also need to maintain their own register of members.

Identity verification

To deter individuals seeking to misuse companies for illegal purposes, Companies House will roll out identity verification measures over the coming months. Directors, PSCs, and members of limited liability partnerships must each undergo identity verification. Existing company officials will be granted a transition period to complete this process, with further details to be provided by Companies House.

Directors who act, prior to being verified will contravene the Act and commit an offence.

When set up, the identity verification process can be undertaken via a Companies House portal, or through an authorised corporate service provider, such as a company formation agent, solicitor or accountant.

How we can help

Navigating the legal frameworks around company law can be challenging. Our corporate lawyers can provide expert legal advice to help protect and support your business.

For further help and guidance on the recent Companies House reforms, please get in touch with our Business Services group.