The Economic Crime and Corporate Transparency Act (the Act) introduces a large and complex set of changes to UK company law that will be phased in over the next few years. As well as more than 50 pieces of secondary legislation, implementation will require new operational processes, system updates plus additional staff and significant investment in training. The first set of measures has now been introduced, and provides Companies House with new and enhanced powers to improve the quality and reliability of its data and tackle the misuse of the companies register. Below is a timeline of what’s happening and when. 

4 March 2024: New powers

• Registrar’s powers: Companies House now has greater powers to query and challenge information that appears to be incorrect or inconsistent with information held by the Registrar, including the power to remove information from the register. There will also be stronger checks on company names that may present a false or misleading impression to the public, including the ability to reject an application to register a name in certain circumstances and to determine a new name for the company, such as its registered company number.

• Registered office addresses: Under the new measures, all companies must now have an ‘appropriate address’ as their registered office address. This is defined as one where documents addressed and delivered to the address would be expected to come to the attention of a person acting on behalf of the company; and delivery to the address can be recorded, therefore enabling acknowledgement of delivery to be obtained. As a result, PO Boxes can no longer be used as a registered office address; an agent’s address however, may still be used.

• Confirmation statement: lawful purpose statement and email address: When incorporating a company, subscribers to the company must now confirm that they are forming the company for a lawful purpose. In addition, as part of filing their annual confirmation statement, a company will need to confirm its intended future activities are lawful. Companies will also be required to supply an email address that Companies House can use to communicate with the company. Updated confirmation statement forms should be used for confirmations due on or after 5 March 2024. 

• Enforcement and sanctions: Companies House now has the ability to follow up unanswered formal requests for more information with more severe consequences. Initial requests will be in the form of a letter, after which it can escalate to a financial penalty, an annotation on the company’s record or even prosecution, depending on the severity of what is being challenged.

1 May 2024: Increased fees

Companies House fees are set on a cost-recovery basis; it does not make a profit on the services it delivers; the new fees will fund the cost of new and enhanced powers. Some of the more notable changes are:

• incorporation fees by post increasing from £50 to £71 and from £10 to £50 when filed digitally; and
• annual confirmation statements filed by post increasing from £40 to £62 and from £13 to £34 when filed digitally.

Upcoming changes

• ID verification: Companies House will look to introduce compulsory identity verification for anyone setting up, running, or owning a UK company by early 2025. This will help mitigate fictitious individuals being registered and add extra assurance that the information available on the register is genuine and reliable. It is anticipated that the process of implementing ID verification will begin in late 2024/2025 onwards.

• Accounts reform: The final set of measures expected to be implemented will be changes to accounts and filing requirements. Companies House will transition to software-only filing. Small companies will be required to file their profit and loss account and directors’ report and micro-entities will also be required to file their profit and loss account. It is likely that these reforms will not be seen until early 2026.

Stay informed

For more information, visit the government’s Changes to UK company law hub highlighting the changes introduced by the Act.

A longer version of this article is available in By All Accounts, the Corporate Reporting Faculty’s online magazine.