The Economic Crime and Corporate Transparency Act and its implications for UK businesses and the economy

Published: Monday 29 January 2024

On 26 October 2023, the Economic Crime and Corporate Transparency Act was passed, marking a significant change for Companies House. Louise Smyth, the Chief Executive, has outlined the Act's impact on improving the accuracy and quality of the data on the register, which is expected to bolster trust and decision-making, benefiting the UK economy, businesses, and citizens.

The Act empowers Companies House with new objectives and enhanced powers. These include ensuring proper document delivery, accuracy of register information, preventing the creation of false data, and stopping companies from engaging in or facilitating unlawful activities. The shift from accepting information in good faith to actively scrutinising it, allows Companies House to reject incorrect information and address inconsistencies.

Significant changes include fee increases in 2024 to fund new powers, enforcement work, and a phased introduction of new measures. Companies must have appropriate addresses (no P.O. Boxes) and registered email addresses, follow stricter rules for company names, and confirm lawful activities annually. Enhanced powers allow for information analysis and sharing with Government departments for crime prevention and detection.

Future plans include compulsory identity verification for company individuals registered as directors or persons with significant control, streamlined accounts filing for small entities, increased transparency for limited partnerships, and enhanced protection for personal data. Non-compliance could lead to financial penalties or prosecution, and annotation of issues on the register to indicate potential issues.

The aim is to make business registration easy while cracking down on fraud and misuse of the register. Gradual steps will be taken to clean up the register, improve data quality and reliability, and ensure responsible, transparent, and accountable company operations. Information about these changes will be communicated through various channels.

We welcome this change and look forward to the next stages.

 Follow the link to watch the video and find out more - Changes to UK company law: a big change for Companies House (youtube.com)

Content image: /uploads/team/unknown.jpg Colette Reeves
Colette Reeves
Director, Governance and Compliance Services
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