Back in March of this year legislation was changed to give Companies House greater powers to query information, stronger checks on company names, new rules for registered office addresses, and new lawful purpose statements. The changes will impact anyone setting up, running, owning or controlling a company in the UK and will mean they will now need to verify their identity.
Here our Practice Director, Sam Paice provides a brief overview of what has changed and the main benefits of the changes.
What has changed?
The first set of changes introduced by the Economic Crime and Corporate Transparency Act includes:
- 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’re 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
Other measures under the act, such as identity verification, will be introduced later – to stay fully compliant at each stage, we recommend exploring our company secretarial service page.
What are the benefits of the changes?
The changes to UK company law from 4 March 2024 offer several benefits:
- Enhanced transparency: the greater powers for Companies House to query information will improve transparency by ensuring accurate and up-to-date records of companies. This helps prevent fraudulent activities and provides more reliable information to stakeholders.
- Improved name verification: stronger checks on company names will help prevent misleading or confusing names. This ensures that companies are easily distinguishable and reduces the risk of brand confusion.
- Enhanced security: the new rules for registered office addresses will enhance security by requiring companies to provide a valid address. This helps prevent misuse of addresses and ensures that official communications reach the right place.
- Identity verification: requiring anyone setting up, running, owning, or controlling a company to verify their identity helps prevent identity fraud and ensures that only legitimate individuals are involved in company operations.
- Lawful purpose statements: The introduction of lawful purpose statements clarifies the purpose and activities of a company. This provides transparency to stakeholders and helps prevent companies from engaging in illegal or harmful activities.
Overall, these changes aim to create a more robust and trustworthy business environment in the UK.
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If you would like to find out more about how we could support your business, get in touch with our team today.