How to Prepare for the Imminent Companies House Reforms

Significant changes are being made to the processes and powers of Companies House (CH), through the new Economic Crime and Corporate Transparency Act 2023 (ECTA) which transitions CH from a passive recipient to an active gatekeeper of company information in the UK. ECTA aims to eradicate criminal activity and foster transparency in new and existing companies.

From 4 March 2024, the following changes will be implemented by CH:

Expansion of powers to query information: CH will have extensive authority to actively challenge company filings and reject information or remove it from the CH register if it is believed to be incorrect or inconsistent with the information that is already available there.

Annotations: Where information is removed from the register, CH may annotate the register to address any confusion and to let users know about potential issues with the information that has been supplied to CH.

Rigorous name checking: CH can reject an application for an incorporation or change of name if the presented company name is false or misleading to the public, or if the name on the register suggests a non-existent connection with a foreign government or an international institution.

Registered Office Addresses: It will be mandatory for all companies to have an appropriate registered office address. P.O Box addresses will not be considered suitable.

Registered email address: All companies must supply a registered email address which will be requested within the incorporation process for new companies and, for existing companies, on filing of their next confirmation statement. Failure to comply with this new requirement without reasonable excuse will be an offence committed and punishable with a fine.

Purpose of forming the company: All companies must confirm that they are incorporating the company for a lawful purpose on incorporation and annually thereafter via the confirmation statement.

Penalties: CH will have the power to impose financial penalties when a “relevant offence” has been committed. The civil sanction is in lieu of criminal proceedings and the maximum penalty is £10,000.

CH fee increases:

(These increases will take effect from 1 May 2024).

  • Online incorporation: from £12 to £50
  • Confirmation statement: from £13 to £34
  • Same day change of name: from £30 to £80

Steps to take now to ensure compliance:

In light of the changes and increased powers of CH, companies are urged to review the company data available on CH’s register and amend it as necessary. Below are some key points for companies to consider before the 4 March 2024.

  1. Review CH register records and make any necessary corrective fillings to mitigate against the risk.
  2. If your registered office is currently a P.O Box address, this must be changed via CH WebFiling or form AD01.
  3. Select a suitable registered email address and implement an internal process to ensure the new email address is actively monitored.
  4. Companies must ensure their compliance team/company secretary is aware of the changes to avoid any rejections or penalties from CH.

In summary, the above measures set the groundwork for strengthening the UK CH system to prevent criminals from using and abusing UK businesses for their own illegal commercial gain.

In time, further changes, such as stringent identity verification of company directors and Persons with Significant Control (PSCs), will be implemented. These are discussed in more detail in our November 2023 blog post. We will publish updates on these developments in due course.