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Company Registration Changes

Monday, May-20, 2024

Company Registration Changes

David Leuchars

The UK Government has recently introduced the Economic Crime and Corporate Transparency Act. This act, to be implemented in phases, brings about a series of changes to Companies House regulations, the official register of companies in the UK with the stated aim of enhancing transparency and combatting economic crime.

Here, David Leuchars of our Corporate and Commercial department, focuses on the first set of changes that have taken effect as of 4 March, exploring the implications for directors, people with significant control (PSCs), and companies themselves.

The changes that have taken effect so far under the new Act are:

  • Greater powers of the registrar to query information provided;
  • A requirement for all companies to confirm the company is formed for a lawful purpose;
  • New rules regarding a company’s registered office; and
  • A requirement to provide Companies House with an email address.

Enhanced Scrutiny and Verification

One of the most crucial changes involves increased scrutiny by Companies House. The act gives the registrar greater authority to verify information submitted by companies. This includes the ability to request supporting evidence for details provided and conduct more rigorous checks on company names. Companies can expect a more proactive approach from Companies House, ensuring that information on the register is accurate and reflects legitimate business activities.

The Lawful Purpose Statement

A new requirement introduced by the act is the "statement of lawful purpose". Companies incorporating on or after 4 March 2024, must now confirm that their purpose is lawful, and that their intended future activities are lawful. Existing companies will need to make a lawful purpose statement when they file their next confirmation statement, from 5 March 2024 onwards. Documents submitted to Companies House will not be accepted if these statements have not been confirmed.

Registered Office and Email Address

The act introduces stricter guidelines for registered office addresses. Companies must now have a physical, "appropriate" address where official documents can be delivered and acknowledged. PO boxes are no longer permissible, however a third-party agent’s address can still be used. The address will only be considered appropriate when any documents sent to it can be expected to come to the attention of someone acting on behalf of the company, and the delivery can be recorded by an acknowledgement.

Additionally, all companies must provide a registered email address to Companies House. This email address, while not publicly available, provides a reliable communication channel for the registrar. An email address can be used for multiple companies and can be updated through the Companies House online service when required.

Further Changes and Considerations

These recent changes represent the first wave of reforms introduced by the Economic Crime and Corporate Transparency Act. Future alterations may include modifications to company accounts filing requirements, enhanced investigation and enforcement powers for Companies House, identify verification requirements for new and existing directors, PSCs, and anyone filing on a company’s behalf, and a greater focus on limited partnerships. These changes are planned to occur later in 2024, but Companies House have not yet confirmed when exactly this will be.

Implications and Considerations for Businesses

Companies operating in the UK must adapt their practices to comply with the new regulations. Here are some steps companies can take now:

  • Lawful Purpose Statement: Develop a clear and concise statement outlining the company's lawful purpose and their intended future activities.
  • Registered Office Address: Ensure the registered office address is a physical location where official documents can be received and acknowledged.
  • Registered Email Address: Designate a dedicated email address for communication with Companies House.
  • Future Verification Procedures:  establish procedures to verify the identities of directors, PSCs, and anyone filing on their behalf, ready for these further changes when they are implemented.

The recent changes to regulations represent a significant step in company compliance. Companies should ensure that their directors are aware of the changes that have been made, and also the further changes planned by Companies House.

There are also a significant number of changes made to many of the standard forms on Companies House, and the fee for making online submissions will in many cases be increased, as of 1 May 2024. For example, the cost of incorporating a company will increase from £27 to £65. Please contact us to discuss these changes in more detail and how they may impact you, or visit the Companies House dedicated website for a full list of updated forms and amended costs.

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