New law: Major company law and Companies House reforms receive Royal Assent

The far-reaching changes aim to stop UK companies being used to aid money laundering, corruption fraud, identity theft and other economic crime, and look to turn Companies House from a ‘passive recipient of information’ to a ‘much more active gatekeeper’. They include:

• a new obligation to verify the identities of new and existing directors, and a similar ID verification regime for new and existing ‘persons with significant control’ (PSCs);
• new restrictions on the individuals permitted to file information at Companies House – including that they are either ID verified or, if they are third-party agents such as professional advisers or agents forming and administering companies for clients, registered with Companies House as ‘Authorised Corporate Service Providers’;
• restricting the use of corporate directors, unless every director of the corporate director is a human being;
• a requirement for companies to collect and register full names and service addresses for every member and, for share companies, to submit a one-off list of members’ details to Companies House;
• abolition of rules allowing small companies and micro-entities to file abridged and filleted accounts;
• power for Companies House to require information to be filed digitally, including accounts;
• power to restrict a company from shortening its accounting reference period except in certain circumstances;
• power for Companies House to reject, query and/or remove information from the public register that appears suspicious, fraudulent, etc or might ‘impact upon the integrity of the register’ because it is eg incorrect or inconsistent;
• a power for Companies House to share data with other public and certain private bodies, and a duty to analyse data available to it, to identify warning signs or triggers that will help it decide whether and when to exercise such powers;
• new criteria to be used to determine whether an address can be used as a registered office address – whether it is an ‘appropriate’ address;
• a requirement to maintain the register of members internally, as a ‘local register’, thus removing the option for a company to ask Companies House to maintain it on its ‘central register’;
• abolition of the requirement to keep any other statutory registers as ‘local registers’ - instead they must be maintained by Companies House on its ‘central register’;
• a new requirement to provide a company email address to Companies House (which will not be visible on the public register);
• new restrictions on the characters that can be used in company names, and new powers to reject names that ‘facilitate’ dishonesty or deception;
• extension of Companies House powers to ‘suppress’ personal details filed;
• a new power to impose automatic civil penalties for failure to comply with a wide range of Companies Act obligations.

No formal introduction dates have been announced for any of the changes, but Companies House has indicated that the following are likely to come into force in early 2024:

• New powers to query information and, in some cases, remove it from the register.
• New checks on company names.
• Requirement that registered offices be at appropriate addresses.
• Requirement to notify Companies House of a registered email address.
• Annotations on the register to let users know about potential issues with the information on it.
• ‘Cleaning’ the register by, for example, de-duplicating information.
• Data-sharing with other public bodies and law enforcement.

Operative date

• Now

Recommendation

• Officers of, and advisers to, limited companies should check out the proposed new laws, and start communicating with directors, PSCs and others affected and planning for the changes when they are introduced.