A policy paper 'Economic Crime and Corporate Transparency Act: outline transition plan for Companies House' has been released. It follows the Economic Crime and Corporate Transparency Bill that was introduced into Parliament on 22 September 2022 and received Royal Assent on 26 October 2023.
The Economic Crime and Transparency Act (2023) (The Act) will reform the role of Companies House and improve transparency over UK companies and other legal entities. It is intended to strengthen the business environment, support national security and disrupt economic crime. It should deliver a more reliable register of company details.
The Act introduces the biggest changes to Companies House since corporate registrations were established in 1844 and applies to the three registrars in the UK, Scotland, Northern Ireland and England and Wales.
The legislative changes are underpinned by a new set of objectives for the registrars and provide an operational framework.
The four objectives
- To ensure that any person who is required to deliver a document to the registrar does so (and that the requirements for proper delivery are complied with).
- To ensure that information contained in the register is accurate and that the register contains everything it ought to contain. This reference to ‘the register’ includes any records kept by the registrar under any enactment.
- 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.
- Facilitating the carrying out by others of unlawful activities.
Companies House accepts that improving transparency and more accurate company information growth will take some time to achieve and elements will be phased in over several years and will incur increases in fees.
There’ll be new responsibilities for:
- All new and existing Company directors.
- People with significant control of a company (PSCs).
- Anyone who files information on behalf of a company.
There is no firm timetable for the implementation of the measures since secondary legislation will be needed with around 50 statutory instruments starting over 18 months with implementation activity and transitional periods continuing until completion in 2027. Timelines are dependent on suitable Parliamentary time in both houses.
The process has already begun with Changes implemented from 4 March 2024 which included improving the quality of information on the register, improving investigation, enforcement and data sharing and more powers to prevent disqualified directors from acting for a company.
Current intended timetable
By autumn 2024 Companies House should be able to issue financial penalties for any relevant offences under the new Act and the Companies Act.
By winter 2024 into 2025 Companies House should be able to:
- Expedite the Striking off of companies where the registrar has concluded the company has been formed on a false basis.
- Annotate the register in a wider range of circumstances, such as when a company has a director who has been disqualified but has yet to terminate their appointment on the register or where Companies House has issued a statutory notice to require more information from a person, but the matter remains unresolved.
By spring 2025 Companies House should be able to:
- Carry out checks on Authorised Corporate Service Providers (ACSPs) to allow them to carry out verification services. ACSPs will be required to be registered in the UK and be subject to the UK’s Anti-money laundering regime.
- Allow individuals to voluntarily verify their identity.
- Receive and assess applications from individuals seeking to have residential addresses suppressed from public disclosure in certain circumstances.
By summer 2025 Companies House should be able to allow access on request to certain trust information on the Register of Overseas Entities.
By autumn 2025 Companies House should be able to:
- Make identity verification a compulsory part of incorporation and new appointments for new directors and PSCs.
- Begin the 12-month transition phase to require more than seven million existing directors and PSCs to verify their identity. Identity verification will happen as part of the annual confirmation statement filing
By spring 2026 Companies House should be able to:
- Make identity verification of the presenters a compulsory part of filing any document.
- Require third-party agents filing on behalf of companies to be registered as an ACSP.
- Reject documents delivered by disqualified directors as they will be prohibited from doing so unless they are delivered by an ACSP for specified filings permitted by law.
By the end of 2026 Companies House should be able to:
- Require all Limited partnerships to submit more information, providing greater transparency for users of the register.
- Complete the transition period for all individuals on the register requiring identity verification, and start compliance activity against those who have failed to verify their identity.
- Facilitate greater cross-checking of information and data between Companies House and other public and private sector bodies.
The Companies House Changes to UK company law website details the changes and what customers and/or their agents need to do and by when. You can also get the latest information by Subscribing to its newsletter.
Useful guides on this topic
Incorporation checklist
This is a step-by-step guide through the process of incorporation of an existing business.
Register of Persons with Significant Control (subscriber version)
What is the Register of Persons with Significant Control (PSC)? Who must complete it? Who is a Person with Significant Control? What details must be included on the Register?
Striking off a company: Step-by-step
What are the steps required to strike off a company? What are the tax implications?
AML: Anti-Money Laundering checks and guidance
A detailed guide to Anti-Money Laundering (AML) procedures and checks, including what factors to consider when taking on a new client and conducting your 'know your client' procedures.
Registration of Overseas Entities: Agent Guide
Registration of Overseas Entities: How to register an Overseas Entity that owns, buys or sells UK property. A detailed guide for Overseas Entities and their UK Agents.
External links
Economic Crime and Corporate Transparency Act: outline transition plan for Companies House
