UK Company Law is Changing – are you prepared?

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You may have seen that a number of changes will shortly be made to Companies House, with the aim of improving transparency and accuracy of the information available – the first of such changes are set to come into force on 4 March 2024 (here indicated by an *). These changes are as a result of the Economic Crime and Corporate Transparency Act (Act) receiving royal assent on 26 October 2023.

Whilst this article does not touch on all of the changes, it will set out the changes which we consider will be of importance for your companies and you, as a director and/ or shareholder.  

  1. Confirmation Statements*

With effect from 5 March 2024, companies will, when filing the annual confirmation statement,  need to:

  • provide a registered email address which will be used by Companies House to communicate with the company (n.b. this email address will not be made available to the public); and
  • confirm that the company’s future intended activities will be lawful.

Companies that incorporate on or after 4 March 2024 will also be subject to these obligations.

  • Registered office*

From 4 March 2024, a company’s registered office cannot be a PO Box but rather an “appropriate address” only – which means:

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

Companies House has stated that it will take action against companies that do not respond to a formal request to change the registered office, which could include:

  • a financial penalty and/ or prosecution; and
  • Companies House changing the address to a default address (following which the company will be given 28 days to provide an appropriate address or a strike off process may be commenced against the company).
  • Accounts

Companies House intend to transition towards software-only filing of annual accounts within the next 2-3 years. Therefore, if your company files hard-copy accounts, you will need to begin exploring digital options.

The Act will also make the process of filing annual accounts more onerous for small companies and micro-entities, with:

  • the abolition of the option for small companies and micro-entities to file abridged accounts; and
  • the requirement for small companies and micro-entities to file profit and loss accounts and for small companies to file a directors’ report.

Companies wishing to rely on an audit exemption will also be required to file an eligibility statement.

  • Identity Verification

Identity verification checks will be introduced for all:

  • directors;
  • persons with significant control (PSCs); and
  • individuals filing information at Companies House on a company’s behalf.

For existing companies, there will be a transition period during which current directors and PSCs can verify their identities, whereas directors and PSCs of new companies will have to verify their identity on incorporation. Identify verification will likely be a one-off requirement with individuals, once verified, obtaining a permanent verified status.

A person wishing to verify their identity will be able to do so by either:

  • directly through Companies House, using software that links an individual’s face to a primary identity document such as a passport or a driving license; or
  • via an Authorised Corporate Service Provider (ACSP) – i.e. an intermediary who already carries out customer due diligence checks for anti-money laundering purposes (e.g. a firm of solicitors or accountants).
  • Statutory Registers

There will no longer be a requirement for a company to maintain an internal register of directors, secretaries and PSCs as this information will be stored centrally at Companies House. Conversely, Companies House are removing the option for companies to store their register of members on the “central register” and so it will become imperative for companies to maintain their own internal register of members.

Despite this, companies will still be required to submit a one-off full list of shareholders so that Companies House can display shareholder information (as at a certain date) in a more user-friendly way on the new “registers” tab. It is expected that companies will provide this list in the first confirmation statement after this particular provision comes into force.

Enforcement action may be taken against companies who do not comply with these new obligations. So, if you have any queries or concerns about the changes, please do not hesitate to contact our Corporate and Commercial Department.

Disclaimer: General Information Provided Only
Please note that the contents of this article are intended solely for general information purposes and should not be considered as legal advice. We cannot be held responsible for any loss resulting from actions or inactions taken based on this article.

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