In late October 2023, the Economic Crime and Transparency Act 2023 (ECCTA) was enacted, marking a significant reform in company law and the most substantial overhaul in the history of Companies House.
The implementation of ECCTA’s measures will be phased and are contingent upon the enactment of secondary legislation.
1. New Provisions Effective From 4 March 2024
Several of the ECCTA provisions take effect today, on 4 March 2024, including:
a. Enhanced powers for the registrar to verify, query, or reject information submitted to Companies House and to request supporting evidence.
b. Initiatives to clean up the register by using data matching to identify and eliminate inaccurate information.
c. Provisions granting the registrar more control over company names.
d. New rules for registered office addresses and a requirement for all companies to register an appropriate email address. Existing companies must register this email address when filing their next confirmation statement after 4 March 2024.
e. Changes to the requirements for registering new companies, including a statement from subscribers that the company is being formed for a lawful purpose. Companies will need to confirm in their annual confirmation statement that their future activities will be lawful.
f. The ability to annotate the register when information is confusing or misleading.
g. The registrar’s new powers to share information with other government departments and law enforcement agencies.
h. Changes to the directors’ disqualification regime, including a new ground for disqualification related to designated persons under sanctions legislation and a provision that a director disqualified under the directors’ disqualification legislation will cease to hold office.
2. Ban on Use of Corporate Directors
In addition to the provisions introduced under ECCTA on 4 March 2024, the government has also enacted its power to make regulations regarding exemptions from the ban on the use of corporate directors under the Small Business, Enterprise, and Employment Act 2015. Although the prohibition itself is not yet in force, this indicates that it remains on the government’s agenda, and it is anticipated that the prohibition and exemptions will be introduced soon.
According to the underlying provisions and the government’s recent Factsheet, it is expected that corporate directors will only be permitted if all directors of that entity are natural persons whose identities have been verified. There will also be a transitional period of 12 months for existing companies with corporate directors.
Author
Gill Laing is a qualified Legal Researcher & Analyst with niche specialisms in Law, Tax, Human Resources, Immigration & Employment Law.
Gill is a Multiple Business Owner and the Managing Director of Prof Services - a Marketing Agency for the Professional Services Sector.
