The first set of changes marking the start of the overhaul of Companies House are expected to be introduced on 4 March 2024 or as soon as possible after that date.
Companies House have confirmed that these changes include:
- the power to query information and request supporting evidence;
- stronger checks on company names and ability to reject company names that could mislead the public, facilitate criminal activities, contain a computer code or appear connected to a foreign government or institution;
- new rules for registered office addresses;
- a requirement for all companies to supply and maintain a registered email address;
- a requirement for all companies on incorporation to confirm they’re forming the company for a lawful purpose, and to confirm the company’s intended future activities will be lawful on their confirmation statement;
- the power for Companies House to annotate company registers when information appears inaccurate or misleading so that the public know about potential issues;
- taking steps to clean up the register, using data matching to identify and remove inaccurate information; and
- sharing company data with other government departments and law enforcement agencies.
Failure to comply with any request from Companies House for information about a company or with the other changes outlined above are offences (committed by the company and its officers) and can result in criminal prosecution and various penalties such as financial penalties and annotations on the Company’s public record so the public know of potential issues.
It is important that you know that these changes are in the pipeline to ensure that your company is compliant with the Economic Crime and Corporate Transparency Act 2023 (“ECCTA”) as and when the new rules come into force.
The changes will come into force in stages with other aspects like identity verification being implemented at a later stage. The overall timetable for implementation is not yet clear.
With the implementation of the first batch of changes in March, as well as Companies House having increased powers to query, challenge and remove information that appears to be fraudulent, incorrect or where discrepancies are identified with information already held, some of the most pertinent changes that are intended to be brought in as part of the first set of changes that companies should be aware of and ensure they are ready for are:
- New Rules for registered office addresses
It is a requirement for a company to have a designated registered office visible on Companies House and the new measures brought in by the act go a step further to require that every company has an ‘appropriate address’ as their registered office at all times. An address is deemed ‘appropriate’ where:
- any documents sent to the registered office are expected to come to the attention of a person acting on behalf of the company;
- any documents sent to that address can be recorded by an acknowledgement of delivery; and
- the registered office address is not a PO Box.
The address can still be a third parties address if it satisfies the above criteria.
In addition to it being an offence if the registered office address is at any time not ‘appropriate’, if Companies House identify an inappropriate registered office address, they will change the address to a default address at Companies House and you will then be prompted to provide an address with evidence of that address being linked to you within 28 days. If no evidence is provided, Companies House will start the process to strike off your company from the register. It is therefore important to make sure that your company registered office is always ‘appropriate’, always up to date, accessible and monitored to ensure it is in line with this new change.
- Registered email address
There will be a new requirement for all companies to give an ‘appropriate’ email address to Companies House and to ensure that such an ‘appropriate’ email address is always available and notified to Companies House.
An email address is an ‘appropriate email address’ if, in the ordinary course of events, emails sent to it by the Registrar would be expected to come to the attention of a person acting on behalf of the company.
You will be required to provide the ‘appropriate’ email address to Companies House when you next file your confirmation statement from 4 March 2024 or when you incorporate a company.
The email address will not be published on the public register and will be used by Companies House to communicate with you about your company.
It is therefore vital that you provide an email address which is used and monitored daily so that any alerts from Companies House are not missed. Like the new rule for your registered office, you will have a duty to ensure the notified registered email address is always ‘appropriate’. Failure to do so is an offence.
- Statement of lawful purpose
You will now have to confirm a statement of lawful purpose on your confirmation statement to confirm that the company’s current and future activities are lawful. Existing companies will have to make the lawful purpose statement in their next confirmation statement from 4 March 2024.
Companies that are formed from 4 March 2024 will have to include confirmation from the subscribing shareholders that they are forming the company for a lawful purpose.
Conclusion
These new changes that are scheduled to be brought in from March 2024 are just the start of a raft of changes that are expected to transform the way Companies House monitor and regulate companies registered in the UK.
It is therefore important that you keep up to date with ECCTA and we can assist you with any advice you may require in relation to this.
