Mark your calendar: changes brought about by the Economic Crime and Corporate Transparency Act 2023 projected for 4 March

At the end of January 2024, Companies House confirmed that the first set of changes introduced by ECCTA 2023 would likely come into effect on 4 March 2024. These changes will include:

• a requirement for all companies to have an appropriate registered office address (PO Boxes are no longer acceptable);
• a requirement for all companies to provide a registered email address; and
• changes to the confirmation statement, requiring all new companies to confirm that the company is forming for a lawful purpose and existing companies to confirm their intended future activities will be lawful in their annual statements.

Companies House will be able to annotate the register where they have received misleading, confusing or inconsistent information from a company. They will also have an enhanced ability to share data with law enforcement and other government departments.

These changes introduce a substantial shift in company law that every company should note. Fortunately, Companies House has created a webpage dedicated to ECCTA 2023 with helpful summaries regarding the expected changes and their practical implications.

ECCTA 2023 also introduced a power allowing the Secretary of State to make provision for the Registrar of Companies to impose a financial penalty where an individual has, beyond a reasonable doubt, committed a relevant offence under the Companies Act 2006. Laid before parliament on 19 February 2024, the draft Economic Crime and Corporate Transparency Act 2023 (Financial Penalty) Regulations 2024 will be the first instrument introduced under this power. The accompanying explanatory memorandum emphasises that civil financial penalties can be a faster and more economical approach to discourage and penalise misconduct compared to criminal prosecution. The registrar will have the discretion to decide whether to pursue the civil sanctions set out in these regulations or refer the matter to law enforcement should criminal sanctions be more appropriate. Whilst the regulations are still being considered by parliament, if made on 1 May 2024, they will become effective on 2 May 2024. If not made on 1 May 2024, it is anticipated that they will come into force the day after their enactment.

Further secondary legislation arising from ECCTA 2023 has come in the form of the Registrar of Companies (Fees) (Amendment) Regulations 2024 and the Registrar of Companies (Fees) (Registrar of Overseas Entities) Regulations 2024, both of which come into effect on 1 May 2024. Again, the explanatory memorandum published alongside the regulations indicates that the increased cost associated with the additional investigation and enforcement activities now expected of Companies House ‘should be borne by those who benefit from being on the register’. Companies will therefore see an increase in incorporation and registration fees, limited liability partnerships, overseas company fees and limited partnership fees. Companies House has published a full list of increased fees.

For more information

The changes present a considerable amount of information for companies to digest. If you need any additional details or support with the changes introduced by ECCTA 2023, contact Catherine Simpson.

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