Companies House is about to go through a significant change in its powers and role thanks to the Economic Crime And Corporate Transparency Act (ECCTA). But what will those changes mean for businesses, and how can they prepare? Here, we’ll take a closer look at the proposals put forward by this new Act so business owners and leaders can be ready.
A Shift From Passive To Active
At present, Companies House only has limited power to ensure that the information on its Register is accurate and reliable. Its role is solely to register this information and ensure it is publicly accessible.
The new Act proposes the implementation of new reforms that will turn Companies House into an active gatekeeper of information rather than simply a passive recipient. The new key powers that the Act will give to the Registrar of Companies include the power to:
- Reject documents if they are inconsistent.
- Ask for extra information.
- Require the resolution of inconsistencies.
- Require companies to report any discrepancies.
- Analyse information to detect or prevent crime.
- Make provisions for financial penalties.
- Strike off companies that have registered with Companies House on false pretences.
- Remove information from the Register.
- Change the registered office address for a company.
- Require documents to be delivered electronically.
How Will Businesses Be Affected?
One of the purposes of the ECCTA is to reduce abuse while increasing corporate transparency. To that end, businesses must be prepared to:
- Supply email contact addresses to Companies House.
- Provide membership information details if they are an existing company.
- Verify the identity of their current registered and recently appointed company directors, relevant legal entities, and people with significant control as well as anybody submitting documents on their behalf.
- Supply an “appropriate address.”
Other Key Changes For Companies
There will also be changes to rules regarding company registers which include eliminating the need for companies to maintain records themselves of their directors’ information. New directors will be unable to assume their role if they fail to notify Companies House about their appointment to the role within a 14-day period of being appointed. Business owners and directors can also expect more in-depth checks of their personal information for safeguarding purposes.
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Disclaimer: This note comprises the view of the author at the time of writing. This note is not a substitute for legal advice. Information may be incorrect or out of date and may not constitute a definitive or complete statement of the law or the legal market in any area. This note is not intended to constitute advice in any specific situation. You should take legal advice in specific situations. All implied warranties and conditions are excluded, to the maximum extent permitted by law.
