Economic Crime Act 2023 Receives Royal Assent
The Economic Crime and Corporate Transparency Act 2023 (ECCTA) received Royal Assent on 26th October 2023.
The ECCTA will result in the most significant transformation of Companies House since it was created in 1884 and there will be a major overhaul of its role and workings. Companies House will be given the power to query any filings, to request further evidence and/or to reject any filings, and to remove material from the register more swiftly. It will also be able to require all information to be filed electronically.
The changes will affect all UK companies and companies need to become familiar with its provisions. Whilst most of the ECCTA will be implemented through as yet unpublished secondary legislation, it is expected that the ECCTA will come into force throughout the course of 2024. As some of the changes will also require significant development and upgrades to Companies House systems and procedures (for example, the ID verification regime), some provisions will take longer than others to come into force. The Registrar of Companies has however indicated that the first changes likely to be implemented in early 2024 include:
- the requirement for all companies to register an email address with Companies House;
- the new rules on registered office addresses;
- the lawful purpose confirmation requirements; and
- Companies House's enhanced powers to query and check information, to remove inaccurate information and to share data with other government departments and law enforcement agencies.
Companies therefore need to start planning now for the ECCTA and making sure that they have all the necessary information and systems in place to comply with the new legislation. This includes in particular, raising internal awareness. Company secretaries and administrators need to familiarise themselves with the all the upcoming changes, as well as the updates to internal procedures and processes that will be required. Companies should also check now that their current filings with Companies House are up to date and accurate (Companies House can and may remove material from the register even after it has already been accepted), and prepare for the ID verification regime by working out who in the organisation will need to have their identity verified.
Companies with group structures should familiarise themselves with changes to the incorporation regime, including the stricter company names regime and review whether any of their group companies have corporate directors. In advance of the abolition of most statutory registers (other than the register of members), companies need to consider whether they still wish to maintain their own internal records for this information. With the abolition of these registers, the onus will be on companies to notify Companies House of any changes to the details of directors and PSCs. Companies also need to ensure that their registered office is at an "appropriate" address and ensure that they maintain a registered email address that is adequately monitored.
Dealings with Companies House will also become more expensive and the fees for filings and other engagements with Companies House will be increasing from early 2024.
We have updated our information and templates to reflect the current position. This is a useful place to start for companies to get an overview of what the ECCTA is and how to comply. We will continue to update our templates and create new content as the implementation timetable becomes clearer.
Companies House has created a new central hub of information about the changes that will be made. This can be accessed here.
The contents of this Newsletter are for reference purposes only and do not constitute legal advice. Independent legal advice should be sought in relation to any specific legal matter.