Economic Crime and Corporate Transparency Act 2023: Companies House changes expected from 4 March 2024

Background

The ECCTA is the second part of a legislative package to prevent the abuse of UK corporate structures and to tackle economic crime, and it follows on from the Economic Crime (Transparency and Enforcement) Act 2022.  

ECCTA makes changes to the information required and processes involved in incorporating and operating a company in the UK. Although it became law in October 2023, some further legislation needs to be passed and new Companies House systems put in place before some of the more onerous reforms, such as identify verification for directors and people with significant control, can go live. 

Timing

A recent Companies House blog indicates that the first set of company law reforms are expected to come into force on 4 March 2024. However, this date might slip as it is subject to there being sufficient time in the parliamentary timetable for the necessary implementing legislation to be passed. The proposed changes include the following:  

Registered office address (ROA)

Your company’s registered office must be at an appropriate address. An appropriate address is somewhere where deliveries by hand or by post can be:

• Recorded by an acknowledgement of delivery
• Expected to come to the attention of somebody acting on the company’s behalf

This means that, going forwards, companies won’t be able to use a PO Box as their registered office.  Companies House has clarified that it will be possible for companies to continue to use a third party agent address as their registered office address, provided that that address is compliant. 

Companies House is being given new powers to act against non-compliant companies. It'll be able to change the registered office address to a default address, to issue fines and, as a last resort, to strike non-compliant companies off the register.

New companies will have to confirm that their proposed registered office is at an appropriate address on a revised incorporation form (Form IN01).

New registered email address (REA) requirement

Your company will be required to maintain a registered email address for communications with Companies House. As with the ROA, the email address must be appropriate, meaning that it’s an email address at which, in the ordinary course of events, emails sent to it by the Registrar of Companies would be expected to come to the attention of a person acting on behalf of the company. The REA won’t be available to the public by searching the register but instead will remain hidden.   

Failure to comply with the REA requirement, without reasonable excuse, will amount to an offence both by the company and its officers, punishable by a fine.

Existing companies will be required to supply a registered email address when submitting their next confirmation statement that has a statement date from 5 March 2024.

New companies will have to supply a compliant REA to incorporate (on the updated Form IN01).

Statement of lawful purpose

Going forwards, persons wishing to set up a new company will have to confirm on incorporation that the company is being formed for lawful purposes (in the updated Form IN01). 

Existing companies will be required to confirm, on an annual basis, that their intended future activities are lawful. The confirmation will be included as a check box to be ticked in the revised confirmation statement form (Form CS01).   

Company names

Additional company name restrictions are set to be introduced prohibiting names that contain computer code, suggest a false connection with a foreign government or international organisation, or names that could facilitate a dishonesty offence. Companies House will be able to direct companies to change any non-compliant names and to refuse to incorporate companies on this basis.

Companies House as an active gatekeeper of information

A key change under the ECCTA is a shift in the role of Companies House away from being a passive registrar towards becoming an active gatekeeper of company information and quasi regulator of company law compliance. 

To that end, Companies House will have increased powers to query, challenge and reject the information that companies provide to it, as well as the ability to verify information by cross referring and sharing information with government and law enforcement agencies. Companies House will also be under a positive obligation to share information with crime prevention agencies. 

It's vital, therefore, to ensure the accuracy of all information submitted to Companies House, past and present, and to seek to amend any inaccuracies in your company’s filing history where appropriate.

Getting your company ECCTA ready

• Check whether your company’s ROA is at an appropriate address. If it isn’t, you’ll need to change it and tell Companies House about the new address (on form AD01) by 4 March 2024. You may also need to take steps to ensure your company complies with the inspection and trading disclosure requirements of the Companies Act 2006 following the change of address. Also, consider implementing internal processes to review the appropriateness of the registered office address periodically.
• Choose an appropriate registered email address for your company that can be accessed by multiple company representatives so that emails are not missed during any absences such as sick or annual leave. Put procedures in place to ensure the email account is routinely checked.  Remember that you’ll need to provide this email address in the next confirmation statement (FormCS01) that you file at Companies House from 5 March 2024.
• Be aware that existing companies will be required to make a lawful purpose statement as part of their next confirmation statement with a statement date from 5 March 2024.
• Familiarise yourself with the new company names regime
• Review your company’s Companies House filing history to ensure that everything is up to date and accurate to reduce the risk that future filings are queried or rejected by Companies House for inconsistency with the company’s filing history.
• Diarise key Companies House filing deadlines to avoid late or missing filings in light of the Registrar’s enhanced enforcement powers

If you have any questions, please get in touch with your usual contact at Mills & Reeve or alternatively refer to the Government website Changes to UK company law which sets out information on certain key aspects of the ECCTA.