Quick Overview of Changes to UK Company Law 

The Economic Crime and Corporate Transparency Act obtained its royal assent on October 26, 2023. It follows the Economic Crime (Transparency and Enforcement) Act 2022 and aims to stop the misuse of UK corporate structures and economic crime. This act focuses on enhancing the accuracy of data on companies and other business entities.  

Under this act, new duties will be assigned to the following:  

1. All current and future company directors  
2. Individuals with significant control over a company (PSCs) 
3. Members of limited partnerships or limited liability partnerships 
4. Anyone who submits documents on behalf of the company (accountants, company secretaries, or company formation agents) 

The initial changes are scheduled to roll out on March 4, 2024. It is important to understand how these updates affect you and your company. This ensures you are prepared to act accordingly. 

Changes in the Act  

The act will introduce some new measures over the next few years. The concise summary of all these new changes is as follows:  

• Improved Quality of Data: Starting March 4, 2024, Companies House will enhance data quality with more authority to review information, stricter company name checks, and updated rules for office addresses.  

• Confirmation Statement Updates: From March 4, 2024, companies must supply a registered email. The registrar will use this to communicate with the company. Furthermore, companies must confirm at the time of incorporation and every year that their intended activities will be lawful. 

• Identity Checks: In the next few months, a new identity verification process will be implemented to mitigate the exploitation of corporate entities for illicit purposes. It will be mandatory for those establishing, managing, or having significant control over UK companies. Verification of identity can be performed using ID documents at Companies House.  

• Accounting Changes: In the next 2 to 3 years, there will be a shift towards digital account filings. This applies to situations where the company directors file themselves and companies that use third-party agents to file annual accounts. Small companies will also witness changes to the filing options, like the requirement to file their profit and loss accounts.  

• Privacy Enhancements: Over the next two years, individuals and companies will have greater protection of their personal information in the public register. This will include options to remove personal data from past documents and protect it from being publicly accessible. 

• Changes to Limited Partnerships: The new measures in the law require limited partnerships to use authorised agents for filing and submitting more detailed information. They have a six-month period to adopt these changes after the mandate of these requirements. Failing to do so will lead to deregistration by Companies House.   

• Ownership Transparency: New rules will apply to increase the transparency in corporate ownership. This demands recording the complete names of every stakeholder in the statutory registers and providing a one-off full list of shareholders to be displayed on the public register. Additionally, there will be restrictions on the use of corporate directors. Companies will be allowed to appoint a corporate director with a legal personality. Moreover, they should be natural persons (individuals and not corporate entities).  

• Enhanced Powers: Companies House will gain stronger investigation, enforcement, and data-sharing capabilities with law enforcement and government bodies. Companies that fail to provide more information will be subject to serious consequences. These include financial penalties, annotations of the company records, or prosecution of the directors.  

Companies House fees will rise from May 1, 2024, to cover future and current expenses for the measures introduced in the act. 

Who Do These Changes Apply To?  

The new legislation is applicable to types of companies and other corporate entities registered with Companies House. These include:  

• Private companies limited by shares 

• Private companies limited by guarantee 

• Limited liability partnerships 

• Limited partnerships 

• Public limited companies (PLCs)  

• Community interest companies (CICs)  

• Overseas companies 

Bottom Line 

The upcoming changes to Companies House regulations highlight the importance of maintaining accurate and transparent company records. Understanding the intricacies of these updates will be essential for companies aiming to thrive in a transparent and regulated environment. 

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