From 3 March 2024, Companies House expects to enact its new powers under the Economic Crime and Corporate Transparency Act to query information provided to its Register.

You can expect:

• Stronger checks on company names.
• New rules for registered office addresses which will mean all companies must have an appropriate address at all times. Companies will not be able to use a PO Box as their registered office address.
• A requirement for all companies to supply a registered email address.
• A requirement for all companies to confirm they’re forming the company for a lawful purpose when they incorporate. Every year, the company will need to confirm that its future activities will be lawful on their confirmation statement.
• Annotations on the register to let users know about potential issues with the information that’s been supplied to us.
• Taking steps to clean up the register, using data matching to identify and remove inaccurate information.
• Sharing data with other government departments and law enforcement agencies.

These early changes aim to stop fraudulent information being accepted and published on the register.

Filing changes

Small companies and micro-entities will be required to prepare annual accounts in accordance with the requirements of section 396 Compaines Act 2006:

• They will be required to deliver a profit and loss account and a directors’ report.
• Micro-entities retain the option to not prepare a directors’ report.
• There will no longer be an option to file abridged accounts.
• There will be an eligibility statement for companies claiming an audit exemption.
• Documents will be delivered together, in cases where more than one document is filed, including for the filing of accounts

Company accounts will need to be filed digitally in iXBRL form and tagged.

Further reforms give new powers to the Registrar including identity checks for directors and restrictions on corporate directorships.

Future plans

The Government’s ‘Corporate Transparency & Register Reform White Paper’ set out the next stages in its plans for wide-ranging reforms to the powers and role of Companies House. It aims to achieve the following:

• Improve the quality and value of financial information held on the Register.
• Increase the powers of the Registrar in order to protect the integrity of the Register to promote enterprise and reduce economic crime.
• Increase transparency by restricting corporate directorships.

The exact timescale for the introduction for the remaining measures to come into force in 2024 is not yet clear it forms part of the Companies House’s five-year strategy.

Improving the quality & value of financial information

In order to improve the quality and value of the financial information held on the Register, there are proposed:

• Changes to reporting of financial information which include:

  • Micro-entities and  will lose the ability to file abridged and filleted accounts.
  • Small and micro-entities will need to file a balance sheet and a profit and loss account.
  • Small companies (other than micro-entities) must file a directors’ report.
  • Dormant companies will need to file eligibility statements.
  • A ‘file once’ approach, whereby a single filing is made with Government rather than filing with different departments, will be explored.

• Changes to reporting of shareholder information include:

  • Companies will be required to record the full names of shareholders in their registers.
  • Private companies and traded companies (where shareholders hold at least 5% of issued shares of any class) must provide a one-off shareholder list. Changes are then updated annually when filing confirmation statements.
  • Companies claiming exemption from providing Persons with Significant Control (PSC) details will need to provide further information to prove exemption.

• New identity verification requirements:

  • New and existing directors, Persons with Significant Control, members of Limited Liability Partnerships and General Partners of Limited Partnerships will require a verified account. This will require their identity to be verified.
  • A verified account can be set up directly with Companies House or details can be provided through a third-party agent.
  • A director cannot be registered without a verified account.
  • Unverified directors and companies directed by such directors will have committed an offence and are subject to sanction.

• New procedures for incorporation agents:

  • The requirement to be registered in the UK and be registered with a UK supervisory body for AML purposes.
  • Changes in supervisory body registration must be notified to Companies House.
  • Be required to conduct Customer Due Diligence checks under the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017.
  • Registration with Companies House.
  • Submit evidence of their identity verification checks undertaken on prospective directors.

Other proposed changes include:

• Removing the paper filing option for most companies.
• Limiting the number of times a company can shorten its annual accounting period, which may be aligned with the five-year rule for lengthening an accounting period.

If you have any questions, reach out to the Robinsons Team

credit: rossmartin.co.uk