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Crucial ECCT Changes Announced by Companies House

Ecct act bill amendments changes and what it means for your business scotland

The Economic Crime and Corporate Transparency Act (“ECCT Act”) received royal assent on 26 October 2023. The ECCTA introduced significant changes to how Companies House regulates UK Companies and has granted them increased powers to enable them to tackle economic crime, support economic growth and improve the transparency and accuracy of the information on the register.

Companies House has advised they are aiming to introduce the following changes on 4 March 2024:


Email Address

Every company will need to provide a registered email address. This email address will need to be monitored by someone who is authorised to act on behalf of the companies (e.g. a director or Secretary).

Newly incorporated companies will need to give a registered email address when they incorporate and existing companies will need to give a registered email address when they file their next confirmation statement.


Statement of Lawful Activity

All companies will be required to confirm that the future activities of the company will be lawful. This will need to be confirmed every year as part of the annual confirmation statement. It will not be possible to file the confirmation statement without including this statement.


Registered Office

The use of a PO Box Address as a registered office facility will no longer be allowed. Companies will be required to always keep an ‘appropriate address’ as their registered office.

An appropriate address is one where:

- any documents received at the address come to the attention of a person acting on behalf of a company and;

- any documents sent to the address can be recorded by an acknowledgement of delivery.

This means that a person will need to receive the mail being sent to your registered office address and the mail being sent needs to be forwarded on to your company.


Increased powers for Companies House

The following new powers for Companies House will also be introduced:

- To question information and request supporting evidence;

- To annotate the register when information appears confusing or misleading;

- Use data matching to identify and remove inaccurate information;

- Share data with other government departments and law enforcement agencies and

- Stronger checks on company names


What does this mean for businesses?

From 4 March 2024 onwards, it will be more important than ever to maintain company registers, ensuring that any relevant changes (such as the appointment of a new director), are filed with Companies House within 14 days in line with the current required timescale. In addition, the information filed with Companies House will need to be rigorously checked for accuracy and clarity to avoid any filings either being removed or annotated by Companies House.


What changes are coming in the future?

Companies House has also announced their intention to bring in the below changes over the next coming years:


Identity Verification

All directors and persons with significant control (PSCs) of a Company will need to complete identity verification. For those in a limited liability partnership, all members will require to verify their identity.

Companies House have announced that there will be a transition period for existing Companies, directors (or equivalent) and PSCs to verify their identity with Companies House.

You can verify your identity through Companies House via a third-party digital service or through an Authorised Corporate Service Provider (an “ACSP”). An ASCP must be registered with a supervisory body for anti-money laundering purposes and based in the UK. An ACSP will be able to verify an individual’s identity with Companies House on their behalf.

Companies House has confirmed that they will publish further guidance on when these changes will come into effect and how the process will work, over the coming months.


Changes to Accounts

Companies House have announced that they will soon be transitioning towards filing accounts by software only. This is to allow for more efficient and secure filings for companies. The move to filing accounts by software only will be phased in over the next 2 to 3 years. The deadline to make the change will depend on the type of accounts filed for the company.


Changes to small company filing options

Small and micro-entity companies will need to file their profit and loss accounts. Small companies that do not qualify as micro entities will also need to file a directors’ report.

Companies House will also be removing the option to file ‘abridged’ accounts.


Protecting Personal Information

Companies House have confirmed that the following measures will come in force over the next two years. Under the ECCTA, individuals will be able to apply to Companies House to suppress the following information from historical documents:

- Residential addresses, when shown elsewhere on the register (e.g. when used as the registered office address for the company);

- Day of birth where included in the date of birth within documents registered before 10 October 2015;

- Signatures; and

- Business occupation.

Companies House has announced their intention to expand on their current protection measures for individuals who are at personal risk of physical harm or violence because of their personal information being on a Companies House public register. Individuals falling into this category will be able to apply to have certain information removed from the public view. This will include:

- name or previous names

- sensitive addresses where public discourse puts its residents at risk (e.g. women’s domestic abuse refuge) and

- partial date of birth or service address in serious cases


Register of Overseas Entities

Since 1 August 2022, Overseas Entities who want to buy, sell, or transfer property or land in the UK must register with Companies House and provide information on who the registrable beneficial owners or managing officers are.

This has applied retrospectively to overseas entities who bought property or land on or after:

- 1 January 1999 (England and Wales)

- 8 December 2014 (Scotland)


Fees

Companies House have confirmed that the annual fee for filing the confirmation statement will rise to £34 and the fee for incorporating a company will rise to £50. These fee increases will take effect from 1 May 2024. To stay up to date, make sure to follow us on LinkedIn.


Restrictions on Corporate Directors

Although not stated in the ECCTA, the UK government has confirmed its intention to bring into force the power to restrict the appointment of corporate directors in parallel with the ECCTA. The intention is to publish regulations that contain a more limited basis on which companies will be able to retain or appoint corporate directors. It is anticipated by Companies House that these reforms will only be affected once the identity verification procedures are in place.


What do you need to do to ensure compliance with the new ECCTA changes?

It is advisable that businesses take proactive measures prior to the changes coming into effect to ensure compliance. To ensure compliance with the new changes, speaking to an expert corporate service provider can provide peace of mind.

As corporate service experts, Burnett & Reid can offer full company secretary services including the use of our address as a registered office address which fully complies with the requirements of the “appropriate address” requirements, and we can provide acknowledgment of delivery and forward all mail to the Company.

As part of our company secretarial and registrar services we can also provide a registered email address to Companies House which we will monitor and pass on communication received through this email address.

As Companies House gains stronger powers to question and remove information on the Register, maintaining accurate and up to date records will become more important and more burdensome. Our company secretarial and registrar services include a regular review service which ensures that the information we hold and the information held at Companies House is accurate.

Get in touch with us to allow us to assist in easing the company administration burden and to help ensure your company is fully compliant with the changing regulations.