Letter to Shareholders to Provide Full Names
The Economic Crime & Corporate Transparency Act 2023 (ECCTA) received Royal Assent on 26th October 2023 and aims to increase corporate transparency as well as the usefulness of the information that is held on shareholders.
Currently the Companies Act 2006 only requires companies to record the names of its shareholders but “names” is not defined. Therefore, a company’s register of members may not include the correct full name of a shareholder. As a core purpose of a company’s register is to provide details of a company’s ownership, the ECCTA introduces a requirement for companies to record the full names of shareholders in their registers. There will also be a one-off requirement for private companies to provide a full list of shareholder names in its first annual confirmation statement after the ECCTA comes into force. In addition, a new duty will be imposed on members to notify to companies the information required to be included on the register of members (being the member's full name and a service address) and any changes to that information. Companies will also be able to serve a notice on members requiring them to provide the information. Failure to supply the information or the making of a false statement will be a criminal offence.
Whilst the introduction of these measures requires implementing secondary legislation before they are in force, companies should begin communicating with their shareholders now and checking that they have their full names recorded. This template letter can be sent to shareholders requesting that they either confirm their details are already correctly recorded or that they will provide the company with these details. There is an accompanying pro-forma reply letter which should be sent with this letter which the shareholder should send back to the company.
The government has created some useful factsheets in relation to the ECCTA generally which reference this new requirement. These can be accessed here.
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