Changes to UK company law

The Economic Crime and Corporate Transparency Bill received Royal Assent on 26 October 2023. This was one of the most significant moments in the long history of Companies House.

Companies House can now play a much greater role in disrupting economic crime and preventing abuse of the register, while supporting economic growth and ease of doing business in the UK.

The measures set out in the Act give Companies House new and enhanced powers to improve the quality and reliability of data.

Companies House will also be able to act more quickly if people tell them their personal information has been used on the register without their consent. This will make a real difference to individuals and it’s something Companies House is particularly passionate about.

This is what will be included.

• Introducing identity verification for all new and existing registered company directors, people with significant control, and those who file on behalf of companies.
• Broadening the Registrar’s powers to become a more active gatekeeper over company creation and a custodian of more reliable data.
• Improving financial information on the register so that the register is more reliable and accurate, reflects the latest advancements in digital technology and enables better business decisions.
• Providing Companies House with more effective investigation and enforcement powers and increasing their ability to share relevant information with partners.
• Enhancing the protection of personal information to protect individuals from fraud and other harm.

The Act has introduced four new objectives for the Registrar of Companies. Companies House will promote these objectives while carrying out their duties.

• To ensure that anyone who is required to deliver a document to the Registrar does so (and that the requirements for proper delivery are complied with).
• To ensure information contained in the register is accurate and that the register contains everything it should.
• To ensure that records kept by the Registrar do not create a false or misleading impression to members of the public.
• To prevent companies and others from carrying out unlawful activities or facilitating unlawful activities by others.

Companies House aims to introduce the first phase of the changes on 4 March 2024, to include:

• new rules for registered office addresses
• a statement of lawful purpose
• greater powers for the Registrar to query information
• a requirement for companies to provide a registered email address.

Some measures in the Act, such as identity verification, will not be introduced immediately. Many of these changes need system development and secondary legislation before they can be introduced.

The identity verification process will require all new and existing directors, persons and entities with significant control and individuals delivering documents or submitting information to Companies House to provide identification documents to Companies House.

Identities will be verified either by Companies House directly or via an Authorised Corporate Service Provider ('ACSP') like Crowe. Companies House will require the person undergoing verification to take a photograph and provide a primary identity document (eg driving licence or passport) which it will compare for likeness.

Companies House will issue guidance and provide a deadline for submitting identification documents for existing directors and persons with significant control.

The Registrar will be able to raise questions about new filings and review, verify and (if necessary) reject information that has already been submitted and is currently shown on public registers.

Where investigations by the Registrar into suspicious activities justify escalation, Companies House will be granted discretion to pass its findings and evidence to relevant law enforcement bodies to take whatever action they deem necessary.