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Companies House, an executive agency of the Department of Business and Trade, is set to implement major changes to UK company law starting on 4th March 2024, following the enactment of the Economic Crime and Corporate Transparency Act of 2023. This act, which became law in October 2023, aims to enhance transparency, combat economic crime, and support the growth of GDP. Also, under the new act, companies must verify that their planned activities comply with the law.
The reforms will fundamentally transform the role and purpose of companies’ houses, granting them greater powers to address economic crime. These changes, contingent on secondary legislation and parliamentary timetables, represent a pivotal moment in Companies House’s history.
The 13 changes to UK Company law include new requirements for registered offices, email addresses, and lawful purposes to enhance transparency and accountability across corporate governance. Below is the detailed list of the 13 changes to UK company law such as:
From 4th March 2024, every company must maintain an appropriate address as its registered office, excluding PO boxes. Third-party addresses like those offered by accountants or solicitors are acceptable, provided they meet specified conditions.
For new company incorporation in the UK, effective 4th March 2024, companies must provide a registered email address to Companies House for communication purposes.
Starting 4th March 2024, companies must affirm the lawful intent of their activities during incorporation and in subsequent confirmation statements.
Over the next two to three years, Companies House will transition to exclusive software filing for annual accounts, gradually phasing out other filing methods.
Small companies and micro-entities will face streamlined filing obligations, including mandatory inclusion of profit and loss accounts and directors’ reports with annual accounts.
Companies eligible for audit exemption must specify their exemption and eligibility on their balance sheets.
To prevent fraudulent activities, identity verification will become mandatory for company directors, LLP members and others with details.
Measures will allow individuals to request suppression of personal details from historical filings on the Companies House register, which will be phased in over the next two years.
New requirements for the limited partnership include providing partner details and maintaining a UK-registered office with implementation pending secondary legislation.
Companies will need to record and provide full shareholders’ details, enhancing transparency on company ownership.
Additional transparency measures will apply to information on people with significant control and Relevant legal entities.
The future restrictions will limit the appointments of corporate directors to entities with legal personalities and require identity verification.
Internal company register for directors, company secretaries and PSCs will no longer be required with information consolidated on the Companies House Register.
The new identity verification requirements are a key aspect of the Economic Crime and Corporate Transparency Act. These changes will take some time to implement, as Companies House needs to develop a system linking individuals to photographic IDs. The main changes are as follows in identity verification requirements:
Every existing UK company director (or member of an LLP) must have their identity verified. Newly appointed directors must complete identity verification before acting in their role.
All existing and new PSCs must verify their identities. The relevant legal entities must provide the Registrar with the names of relevant officers whose identity is verified.
The verification process can be done directly through Companies House or an Authorized Corporate Service Provider. They include registered intermediaries such as accountants, solicitors and company formation agents.
The individuals filing documents to the Registrar on their behalf must have their identity verified and then file documents on behalf of others.
These initial changes to UK company law bring significant implications for businesses. Companies must update their registered office addresses to comply with new standards, provide verified email addresses for official communications, and ensure their activities are lawful through annual statements. Additionally, enhanced identity verification and streamlined filing processes aim to increase transparency and reduce fraud.
These reforms require immediate attention and compliance to avoid penalties, ensuring business aligns with the new regulatory framework that fosters a more transparent and resilient corporate environment. This act aims to enhance the transparency and accuracy of a company’s records by empowering Companies House to tackle economic crime more effectively. The key changes are made to grant Companies House greater authority to query and verify information, scrutinize and reject incorrect or inconsistent details and impose penalties for non-compliance.
The 13 new changes in UK company law, set to take effect on 4th March 2024, aim to enhance transparency, reduce fraud and economic crime, and ensure lawful corporate activities. These reforms, part of the Economic Crime and Corporate Transparency Act, grant Companies greater powers to scrutinize company information and impose penalties for non-compliance. It is crucial to maintain a transparent and resilient corporate environment.
Companies House will have enhanced power to query information, implement stricter checks on company names, enforce new rules for registered office addresses and require new lawful purpose statements.
Part 15 of the Companies Act 2006 outlines the requirements for preparing, distributing and filing accounts and reports, including selecting the accounting framework.
The small companies and micro-entities will face streamlined filing obligations, including mandatory inclusion of profits and loss accounts and directors' reports with annual accounts to simplify compliance and maintain finances.
The Economic Crime and Corporate Transparency Act 2023 was enacted in the UK on 26th October 2023 to combat financial crime and introduce several impactful changes into law.
Yes, you can register two companies at the same address in the UK as long as the address is in the right UK region.
Companies House, an executive agency of the Department of Business and Trade, is set to impleme...
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