New rules to combat fraud and improve the integrity of the Companies House database come into effect in March 2024. In this guide, we look at how these changes affect limited company contractors.
Companies House – which maintains the central register of all UK limited companies – is set to play a key role in enforcing the new Economic Crime and Corporate Transparency Act. The Act received Royal Assent in October 2023.
The main goal of the new legislation is to ensure that the information submitted to and stored by the Registrar is accurate and transparent.
According to some commentators, the changes represent the ‘biggest shakeup’ in the 180 history of Companies House (est. 1844).
A provisional date – 4th March 2024 – has been set for the first salvo of changes to become law.
Greater Companies House powers to check the validity of company data
The registrar will have greater powers to check and challenge the integrity of new and future information submitted by companies. This includes annotating the register where it identifies misleading or confusing information.
Companies House will have the power to quickly remove fraudulent or misleading information, including attempts at ‘passing off’.
We have seen recent examples in the contracting industry of unscrupulous directors setting up umbrella companies with misleading names. So, these new measures are bound to be widely welcomed.
New identity checks for directors and PSCs
The directors and PSCs of any new companies need to pass a new identity check directly with Companies House, or through an authorised intermediary, such as an accountant.
There will be a transition period for officials of existing companies, but they will also need to prove their identity in the future.
Registered Office Address must be ‘appropriate’
All companies must provide an ‘appropriate’ registered address from 4th March 2024. This cannot be a PO Box.
According to the government guidance:
- any documents sent to the registered office address should be expected to come to the attention of a person acting on behalf of the company.
- any documents sent to that address can be recorded by an acknowledgement of delivery.
A third-party – such as an accountant or formations agent – can still provide an address service for clients, as long as the address fulfils the requirements listed above.
Statement of lawful purpose
When you form a new company, the subscribers need to state that they are forming the company for a lawful purpose.
Existing companies need to provide the same assurance on their next confirmation statement submission.
Official email address for each company
All companies will have to provide a registered email address for future communications from Companies House.
New companies will be asked to provide their email address from 4th March 2024 onwards. Existing companies can provide this when they next submit a confirmation statement.
Failure to ‘maintain’ this address is deemed an offence under the new regime.
Apply to suppress historical personal information
Personal information contained in legacy documents is easily available via a Companies House search. This includes dates of birth, residential addresses and even directors’ signatures.
This type of information is no longer published on the public record, but still exists for historical submissions.
You can apply to suppress past residential addresses, dates of birth (pre-2015 documents), signatures and business occupations.
Transparency over company ownership
In a bid to make company information more transparent, when the new rules come into force, companies must:
- record the full names of shareholders who are individuals – or the full names of corporate members and firms – in their registers
- provide a one-off full shareholder list so Companies House can display shareholder information in a more user-friendly w
Economic Crime and Corporate Transparency Act – future steps
These changes represent just the first steps in the rollout of the Act.
Future changes include:
- Increased Companies House fees – considering it only costs £12 to register a company, this is unsurprising!
- Digital filing – paper returns will be phased out entirely for most companies.
- Company accounts – there will be only two filing options in the future, and the option to file abridged accounts will cease. Small companies and ‘micro-entities’ will need to file profit and loss accounts.
You can find out more about the March 4th 2024 changes here.
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