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UK Company Law Changes

by Stuart Hinds

12 February 2024

On October 26, 2023, a new law called the Economic Crime and Corporate Transparency Act was approved. Here’s a summary of the key measures which will be introduced over the next few years.

On October 26, 2023, a new law called the Economic Crime and Corporate Transparency Act was approved. The act introduces the biggest changes to Companies House (which keeps records of businesses in the UK) since corporate registrations were established in 1844. This law is here to help fight economic crime and support the growth of businesses. The goal is to make sure the information in the records is accurate and trustworthy, boosting confidence in the UK’s economy.

 

Here’s a summary of the key measures which will be introduced over the next few years:

Improving Data Quality

Starting from March 2024, Companies House will have more power to check and ask questions about the information companies provide. They’ll also set new rules for where a company’s main address should be. This is to make sure the company’s address is real and can be used for official communication. Companies will also need to confirm they are starting for legal reasons when they register and each year after that.

 

Checking Who’s Who

In 2024, there will be a new rule that everyone involved in running a company needs to prove who they are. This includes company directors, people with significant control, and members of limited liability partnerships. You can prove your identity directly with Companies House or through approved agents.

 

Changes to Filing Accounts

Companies will need to start filing their annual accounts using special software. This is to make things more efficient and secure. It will be rolled out gradually over the next few years. Smaller companies will also need to provide more details in their accounts. If a company says it doesn’t need an audit, there will be extra statements to show why.

 

Updates to Confirmation Statements

Companies will have to provide an email address for official communication with Companies House (but this won’t be public). They will also need to confirm that they are doing legal activities. These changes will apply from March 2024.

 

Companies House Fees

The cost of using Companies House services will go up in 2024. This is because they need more money to make the new changes and improvements. The fees help cover the costs of running Companies House, and they don’t make any profit from them.

 

Protecting Personal Information

New rules will allow people to hide some personal information from old documents. If someone is at risk because their information is on the public records, they can ask to keep it private. This includes details like home addresses, birth dates, and signatures.

 

Changes for Limited Partnerships

For certain types of businesses called limited partnerships, there will be more rules about providing information. Companies House will have more powers to manage these partnerships and make sure they are following the rules.

 

Being Open about Company Ownership

Companies will need to share more information about who owns them. This includes the names of individual shareholders or the names of other companies that own them. This makes things clearer for everyone. Also, companies will have restrictions on using corporate directors, making sure real people are in charge.

 

Investigation and Sharing Information

Companies House will have more authority to investigate and enforce rules. They can also share information with law enforcement and other government agencies to keep things fair and legal.

 

Register of Overseas Entities

The Register of Overseas Entities came into force through the Economic Crime Act 2022. This means that overseas entities dealing with UK property or land must register with Companies House, enhancing transparency. Non-compliance results in serious consequences, including restrictions on property transactions, financial penalties, and prosecution.

In a nutshell, the Economic Crime and Corporate Transparency Act brings many changes to how businesses are recorded and managed. The aim is to make things clearer, more honest, and safer for everyone involved.

 

Next steps

For more detail on the changes introduced by the Act, please download our UK Company Law Changes guide. As always, please feel free to get in touch with our expert team who would be pleased to discuss what’s changing for you and your company, so you can take action at the right time.

 

Source: Gov.uk website Mon, 12 Feb 2024 13:17:08 +0100

Stuart Hinds

Managing Partner

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