The Economic Crime and Corporate Transparency Act 2023 (the Act) received Royal Assent on 26 October 2023. B P Collins’ corporate and commercial team will be explaining and providing updates on this Act over the upcoming months.
As an overview, the Act aims to improve corporate transparency in the UK and introduces a large number of changes to the Companies Act 2006.
The Act has a number of key objectives:
- reforming the role of Companies House including:
– by introducing the identification requirements of Company directors and shareholders;
– having the ability to require all documents to be filed electronically;
– changes to the financial information companies are required to deliver to the register;
– being able to share data with other regulators and public authorities; and
– broadening the Registrar of Companies House’s powers.
Some of the powers Companies House will have under the Act include requiring additional information to be provided, having the ability to query and reject filings and also to remove information from the register more swiftly.
- reforming limited partnerships (for example, there will changes to registration and transparency requirements);
- introducing additional powers to recover crypto assets if they are the result of illegal activity; and
- a strengthening of anti-money laundering powers.
When will the Act come into effect?
Some limited provisions (such as amendments to certain money laundering regulations) have already come into effect or are about to in January 2024. Further changes are set to be introduced in March 2024, including the following:
- Giving Companies House greater powers to:
– query information that is incorrect or inconsistent with pre-existing information already on the register;
– update the register using data matching to remove information that is wrong;
– annotate the register to flag potential issues with the information to users; and
– share data with other law enforcement bodies and government departments.
- Companies will be required to supply a registered email address.
- Companies will also be required to use an appropriate address as their registered office address and will no longer be able to use a PO box for that purpose.
- Enhanced checks on company names giving a false or misleading impression to the public.
However, various major measures introduced in the Act require new secondary legislation and guidance. In particular, new systems and processes will need to be developed in relation to how directors and shareholders will need to be identified. It will therefore be some time (perhaps over the course of the next year, if not longer) before the majority of the provisions are in force. Under the Act, the government will need to prepare reports as to how the provisions will be implemented and how they operate – the first report must be laid within six months of the Act being passed – by 26 April 2024.
Businesses and individuals should be aware of what changes are coming and should start considering what action they can take, as the changes are likely to be fairly substantial.
B P Collins’ corporate and commercial team will be monitoring new legislation under the Act closely and as and when new legislation is brought forward by the Government to bring parts of the Act into force, it will provide updates.
In an upcoming article, it will also summarise what the upcoming changes could mean for you and your business.