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Companies House Reforms: Update

The Economic Crime and Corporate Transparency Act 2023 (‘the Act) has brought into force the first measures in the changes to the registration of companies and maintenance of the registry kept by Companies House.

The registrar (since 4 March 2024) now must:-

  • Ensure that any person who is required to deliver a document to the registrar does so (and that the requirements for proper delivery are complied with);
  • Ensure that information contained in the register is accurate and that the register contains everything that it ought to contain;
  • Ensure that records kept by the registrar do not create a false or misleading impression to members of the public; and
  • Prevent companies and others from carrying our unlawful activities or facilitating the carrying out by others of unlawful activities.

The registrar also now:-

  • Has wider powers to seek information and supporting evidence;
  • Should carry out strong checks on company names;
  • Has further powers to deal with and remove factually inaccurate information;
  • Can share data with law enforcement agencies and other government departments.

When applying to incorporate a company, the application must contain (non-exhaustive):-

  • A statement that the subscribers wish to form the company for lawful purposes;
  • All of the required information about each of the subscribers to the memorandum of association;
  • A statement that none of the subscribers are disqualified, or if they would be but for permission of the court or a relevant licence;
  • A statement that each of the directors identity is verified; and
  • An address which is not a PO Box;

These changes, the greatest in the 180-year history of Companies House are intended to “crack down on abuse of the register” (CEO, Lousie Smyth). The priority is stated to be dealing with situations where names and addresses have been used without people’s consent.

The new powers will enable the registrar to report and remove personal information that has been misused (whereas a formal application to court was previously required – at the cost of the innocent party).

As we reported in our first article on the reforms, the government’s aim is to prevent criminals from using Companies House and the register, to prevent the laundering of proceeds of crime, and to protect innocent people whose details might be used fraudulently. The idea is to “enhance the UK’s reputation as a great and safe place to do business” (Kevin Hollinrake MP)

Despite the changes, one of the key concerns remains that fraudsters may incorporate a company to be used for a brief period of time (for its illicit activities) and then closed down – perhaps before the registrar has had time to react.

There is a set to be phased roll out of further powers and requirements (although no timescales have been set).

Saunders Law provides expert advice to companies, directors and shareholders. Please get in touch with us on 020 7315 4801 or make an enquiry with our team.

 

 

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