What are the requirements?
The ECCTA introduced a new set of statutory objectives for Companies House to:
- ensure that those required to deliver documents to the Registrar do so, and that the requirements relating to proper delivery are complied with
- ensure that documents delivered to the Registrar contain all of the information that they are required to, and that the information provided is accurate
- minimise the risk of information on the register creating a false or misleading impression to members of the public
- minimise the extent to which companies and other firms (a) carry out unlawful activities; or (b) facilitate the carrying out by others of unlawful activities
In practice, these are fulfilled by new powers to, amongst other things:
- reject documents for inconsistencies
- require resolution of inconsistencies
- require additional information to be provided in relation to a filing
- remove material from the register even after it has already been accepted
- analyse information for the purposes of crime prevention or detection where the Registrar considers it appropriate
The ECCTA provides for a far more robust approach from Companies House regarding filings, diverging from its previously passive stance of generally uploading most information provided. The powers to investigate and require resolution of inconsistencies in the register may particularly present issues where new filings are inconsistent with historically erroneous ones.
In addition, Companies House is empowered by the ECCTA to proactively disclose information to certain persons or bodies (e.g. government bodies, law enforcement bodies and insolvency practitioners) for purposes connected with the exercise of its functions, provided it does so within the confines of existing data protection legislation and obtains HMRC authorisation where relevant. Where information is shared for the purpose of preventing, detecting and investigating economic crime, Companies House will be exempt from any civil liability for breach of confidentiality in relation to the disclosure. However, the increased information sharing powers are balanced by greater protection of personal information such as a new process whereby individuals (or a company on behalf of an individual) can apply to have their personal information suppressed from the public view. Governmental guidance on information sharing measures under the ECCTA can be accessed here.
When do they take effect?
The Economic Crime and Corporate Transparency Act 2023 (Commencement No.2 and Transitional Provision) Regulations 2024 brought the majority of Part 1 (Companies etc) of the ECCTA into force on 4 March 2024, including the following measures:
- the ability to scrutinise and reject information that seems incorrect or inconsistent with information already on the register and, in some cases, removal of information
- stronger checks on company names
- new rules for registered office addresses which will mean all companies must have an appropriate address at all times (for example, a PO Box will not be sufficient)
- a requirement for all companies to supply a registered email address:
- companies formed after 4 March 2024 are required to give their registered email address upon incorporation
- existing companies must supply a registered email address along with any confirmation statement filed dated after 4 March 2024
- a requirement for subscribers to confirm that they are forming a company for a lawful purpose upon its incorporation and that a statement be included on each subsequent confirmation statement that the intended future purposes of the company remain lawful. Existing companies will need to make this statement in any confirmation statement dated after 4 March 2024
- making annotations on the register to let users know about potential issues with the information that has been supplied to Companies House
- 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
What should I do now?
It is important to make sure that filings are done correctly and not as an afterthought, as breaches or incorrect filings may be picked up and penalised more actively by Companies House using its new powers. Companies may also wish to audit their existing filings (or at least recent ones) for accuracy to avoid being penalised for inconsistency on future filings.
If your company currently relies on a PO Box for its registered office address, you will need to identify a new registered office and update Companies House as soon as possible. We also recommend identifying or creating a suitable email address to use as your registered email address going forwards. Ideally this will not be linked to a particular employee in case that person leaves the company.
If you would like to explore the company secretarial support we can offer (including provision of a registered email address), please contact Cosec@stevens-bolton.com.
What are the consequences of not complying?
The ECCTA creates a new civil penalties regime which allows Companies House to impose financial penalties for breaches of the Companies Act 2006 directly in addition to pursuing enforcement through the courts. Under the Economic Crime and Corporate Transparency Act 2023 (Financial Penalty) Regulations 2024, Companies House is able to impose fines up to a maximum of £10,000 and more details of its enforcement strategy are set out in the following governmental guidance:
The guidance on its approach to financial penalties indicates that, for the time being, Companies House does not intend to issue financial penalties exceeding £2,000.
Joe Bedford
Lucy Barnes