3
October
2024

Key Companies House reforms under the Economic Crime and Corporate Transparency Act 2023

Companies must ensure that the company’s name meets the new requirements and that no notice has been received by the company from Companies House.

Emily Pritchett | Paralegal – Corporate & Commercial

The Economic Crime and Corporate Transparency Act 2023 gained royal assent on 26 October 2023, but the reforms are coming into force in phases from 4th March 2024.

It will alter how companies are required to record personal data in order to properly identify the directors and principal shareholders.

It requires an additional level of identification of officers and shareholders and the provision of personal information to assist in proof of identity.

Our Corporate and Commercial Paralegal, Emily Pritchett explains the key reforms under the Act and how companies can navigate the changes.

Key reforms under the Economic Crime and Corporate Transparency Act 2023

  • Individual verification (IDV): all new and existing directors will have to verify their identity with photo ID with Companies House. This is the key to the Act. If an individual is not properly verified on Companies House or has not notified Companies House of their appointment, they must not act as a director. It will be a criminal offence to continue as a director if they do not provide the information when requested to do so. PSCs and officers of RLEs will also be required to verify their identities. There will be two types of IDV, either by an individual verifying directly with Companies House or indirectly through an ACSP (Authorised Corporate Service Provider) who will then deliver a verification statement to Companies House.
  • Corporate directors are no longer allowed except in the following cases: (1) the corporate director is incorporated in the UK and has only natural persons (with verified identities) as its own directors (2) there is at least one natural director sitting alongside the corporate director (an existing legal requirement).
  • Anyone making filings on behalf of a UK entity must be verified or authorised by Companies House.
  • Companies will need to provide a one-off shareholders list; this must be annually updated through confirmation statements. This is similar to the old Companies House requirement from many years ago that was discontinued.
  • Full names of shareholders must be entered on the company’s register of members.
  • Abolishment of statutory registers (other than the register of members) and the inability to keep the register of members at the central register.
  • The company must have an appropriate registered office, requirements include: somewhere that documents can be delivered to and it would be expected that they would come to the attention of the person acting on behalf of the company. A PO Box will not be appropriate.
  • Nomination of an appropriate email address for communication with the company.
  • New rules regarding company names: names must not include reference to a criminal purpose, suggestive connections with foreign governments or computer code.

How should companies prepare for the changes?

  1. Agree on what the company’s appropriate email address will be. Things to consider include: who has access to the email account? How does it come to the attention of the company? In the case of acquisitions, who will have access post-completion?
  2. Confirm where the company’s registered office will be located. This should not be too onerous on the company as the company will already have such an address.
  3. Prepare directors and PSCs (and any relevant officer in the case of an RLE) for ID verification so that when the IDV becomes live, they are prepared.
  4. Ensure that the register of members is up to date and compliant with the new changes (including, full names of shareholders and service addresses). Ensure that the register is held by the company itself rather than on the central register.
  5. Prepare for the removal of corporate directors should they not meet the new requirements set by Companies House. Who are the new directors to be?
  6. Prepare the company’s one-off shareholder list. When the new Act comes into force this will then be simple to file.
  7. Ensure that the company’s name meets the new requirements and that no notice has been received by the company from Companies House. Review the prohibited names list with Companies House.

If you require assistance in implementing your company’s compliance with the new obligations, please contact our Corporate and Commercial Paralegal Emily Pritchett at emily.pritchett@primaslaw.co.uk

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