The Economic Crime and Corporate Transparency Act will introduce the biggest changes to Companies House since corporate registrations were established in 1844.
The introduction of this Act will increase the protection of personal information held by companies and provided to Companies House. Any person whose details appear on the register at Companies House can apply to have their personal information suppressed from public view.
This is an important change due to the increase of fake companies being registered at Companies House purporting to be other businesses. These companies are cloning other businesses and running elaborate scams, exploiting the lack of identification required to set up a company at Companies House.
To prevent these fraudulent companies being set up, Companies House will be introducing a new verification system. This will require all new and current directors, PSC and registrable relevant officers to verify their identity at Companies House (unless they are exempt for reasons such as national security).
It will be an offence for a person to act as a director without first having verified their identity.
Filing procedures:
Some other changes to Companies House impact the way documents can be filed at Companies House. An officer or employee whose identity has been verified (with the above procedure) can file documents or an Authorised Corporate Service Provider (ACSP), such as a law/accountancy firm who are registered as an ACSP can do so on the company’s behalf.
Company administration:
A company’s registered office must be an ‘appropriate address’. This means an address where delivery can be acknowledged and come to the attention of a person acting on behalf of the company. PO Boxes will not be an ‘appropriate address’. If Companies House determine that an address is not appropriate, it will be changed to a default address held at Companies House. The company will then have 28 days to provide an appropriate address with evidence of proprietary ownership or Companies House will start the process to strike the company off.
Companies must now also provide an appropriate email address for communication with Companies House.
Shareholders of companies will also be required to provide information about themselves, including full details of their name and service address. There will be a continuing obligation on the shareholders to keep this information up to date and to reflect any changes (such as a change of address). Any shareholder who does not comply will be guilty of an offence punishable by a fine or imprisonment.
There will also be a new requirement when you incorporate a company. The subscribers will need to confirm that they are forming the company for a lawful purpose. The company will need to confirm that their intended future activities are lawful on their annual confirmation statement.
Limited partnerships:
Limited partnerships will be required to provide more information such as: verifying the identity of general partners, providing their names, dates of birth and residential addresses, filing an annual confirmation statement and providing a registered office within the UK.
This information will need to be filed through an ACSP that is registered with Companies House.
Action points:
Although this act has not yet come into force, it is recommended to start implementing controls and ensuring all information relating to the shareholders, directors, PSCs and registrable relevant members is up to date and correct. This will ensure that when the legislation comes into effect, companies are prepared.
For further information or advice, please contact our Corporate and Commercial team on 0116 289 7000 or email info@bhwsolicitors.com.