ECCTA changes to Companies House

The Economic Crime and Corporate Transparency Act (“ECCTA”) received royal assent on 26 October 2023. The Act will come into force in stages and it is anticipated that the first changes will be introduced on 4 March 2024 (dependent on parliamentary timetables).

What are the changes?

In summary, those changes affect the registration of new and existing businesses with Companies House, and include:

• greater powers to query information and request supporting evidence
• stronger checks on company names
• new rules for registered office addresses
• a requirement for all companies to supply a registered email address
• a requirement for all companies to confirm they are forming the company for a lawful purpose when they incorporate, and to confirm its intended future activities will be lawful on their confirmation statement
• the ability to annotate the register when information appears confusing or misleading
• 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.

Below, we examine some of the  more important changes in more detail:

Registered office changes

Companies must have an ‘appropriate address’ as their registered office and email. This means companies will not be able to use a PO box as their registered office address.

An ‘appropriate address’ is one where:

• any documents sent to the registered office should be expected to come to the attention of a person acting on behalf of the company
• any documents sent to that address can be recorded by an acknowledgement of delivery.

Companies that do not have an appropriate registered office address could be struck off the register.

In addition, there will also be a new requirement for all companies to give a registered email address to Companies House when they incorporate. Existing companies will need to give a registered email address when they file their next confirmation statement

Registrar powers

The registrar will have greater powers to query and challenge information on the register that appears to be incorrect or inconsistent.

The registrar will also be able to remove information more quickly if the information is inaccurate, incomplete, false or fraudulent.

There will be “stronger checks” on company names that may give a false or misleading impression.

New verification responsibilities for authorised corporate service providers (ACSPs) and trust and company service providers (TCSPs) will include new obligations for enhanced due diligence.

Statement of lawful purpose

Anyone setting up a company will be required to confirm that they are forming the company for a lawful purpose.

A company will also need to confirm its intended future activities are lawful on their annual confirmation statement.

The purpose behind this change is to make it clear that all companies on the register, new and existing, have a duty to operate in a lawful way.

The ECCTA also creates a new criminal offence if a company fails to prevent fraud being committed by its employees or by people working on the company’s behalf.

Enforcement and sanctions

Companies House will have powers to:

• fine a company
• add an annotation on a company’s record
• prosecute a company
• strike off non-compliant companies.

Who could be affected?

Under the ECCTA there will be new responsibilities for:  

• all new and existing company directors 
• people with significant control of a company (PSCs)
• anyone who files on behalf of a company. 

The new legislation applies to all entities registered with Companies House, including:  

• private limited companies 
• public limited companies (PLCs) 
• limited liability partnerships (LLPs) 
• limited partnerships (LPs) 
• community interest companies (CICs) 
• overseas companies. 

The legislation applies to companies and other entities registered in England and Wales, Scotland, and Northern Ireland. 

The legislation will also apply to anyone who files on behalf of clients, such as accountants and company formation agents.

You will need to register as an authorised agent with Companies House. Authorised agents are also known as Authorised Corporate Service Providers (ACSPs). 

How can we help?

Weightmans’ business and financial crime team can advise on the new changes and how they will impact upon your new or existing business. We provide preventative compliance advice to businesses which helps limit the risk and exposure to criminal and regulatory sanctions. We offer training and e-learning packages that augment that service.

Our lawyers can assist or advise a business facing scrutiny or sanctions from the registrar for failing to comply with the new requirements of the ECCTA to ensure any business disruption is minimised. Our internal investigations offering helps businesses to identify any internal issues and highlights any potential criminal or regulatory exposure.