Changes to UK Company Law
After The Economic Crime and Corporate Transparency Act became law in October 2023, the act will introduce significant changes to UK Company Law from 4 March 2024. These changes aim to improve the accuracy and quality of data filed, and thus help Companies House tackle economic crime and improve transparency over the register. Companies House has said that this act will be implemented in phases, and this article aims to break down the key early changes and how this will impact you.
New rules for registered office addresses
Firstly, from 4 March 2024, companies will be required to have an appropriate address as their registered office at all times. A registered office is the official contact address of a company or limited liability partnership (LLP), where statutory letters, notices, and other communications from government bodies will be sent. The registered office also appears on the register of companies and can be viewed on the Companies House website.
Companies House have said that an appropriate address is one where any documents sent to the registered office must come to the attention of a person acting on behalf of the company, and that documents sent can be recorded by an acknowledgement of delivery. A person acting on behalf of the company can be a director or an authorised agent, such as your accountant. This means you can still use a third-party agent’s address, as long as this meets the criteria for an appropriate address.
Before these changes, companies and LLP’s who did not want to use their own address as their registered office were able to use a PO Box as their registered office instead. These changes however, mean that from 4 March 2024 you will not be able to use a PO Box as your registered office. For those clients still wishing to keep their own address off the Companies House public register they can use a third-party agent’s address from now on. The process of switching addresses is relatively simple and we will be more than happy to help our clients with this process.
Companies and LLP’s that do not have an appropriate registered office address could be struck off from the register.
Registered email address
There will also be a requirement for all companies to give a registered email address to Companies House from 4 March 2024.
This email address will be used to communicate with Companies House, and you will have a duty to maintain an appropriate registered email address. Unlike the registered office, the email address provided is not made available to the public.
You can register the same email address for more than one company, and you’ll be able to change your registered email address through Companies House ‘update a registered email address’ service.
New companies and LLP’s will need to give a registered email address when they incorporate, and existing companies and LLP’s will need to give a registered email address when they file their next confirmation statement dated from 5 March 2024 onwards. This confirmation statement is to verify that data recorded at Companies House is accurate at that point in time and to update the data if any changes have been made in the past 12 months. If you need assistance in filing a confirmation statement, please get in touch.
Statement of lawful purpose
Under the new act, you will be required to confirm the company’s intended future activities are lawful on a confirmation statement.
Documents will not be accepted if these statements have not been confirmed and action may be taken against your company if Companies House receives information showing you are not operating lawfully.
From 4 March 2024, if you intend to incorporate a company, the shareholders will be required to confirm they’re forming the company for a lawful purpose, and existing companies will need to make a lawful purpose statement when they file their next confirmation statement after 5 March 2024.
Identity Verification
As well as declaring your intentions are for lawful purposes, over the coming months, Companies House will also introduce a new identity verification process to help deter those wishing to use companies for illegal purposes.
For new companies, all directors and people with significant control will need to complete identity verification which they can do directly through Companies House, or through an authorised agent. People with significant control (PSC) include anyone with more than 25% of shares in the company, more than 25% of voting rights in the company, the right to appoint or remove the majority of the board of directors, or anyone who can influence and control your company. The PSC register should be maintained and kept up to date as soon as changes are made.
For existing companies, all directors and people with significant control will have a transition period to verify their identity with Companies House. We will publish further updates when Companies House has outlined the plans for this transition period.
Changes to limited partnerships
Along with the new changes mentioned above, limited partnerships will also have new measures introduced in an effort to make information more accessible and transparent.
When these measures are introduced, limited partnerships must provide partners names, date of birth and usual residential address to Companies House. They will also be required to provide a standard industrial classification code, which provides Companies House with a description of their company’s nature of business.
Moreover, limited partnerships will not be able to file their information by themselves and will be required to file their information through an authorised agent such as their accountants.
Currently there is nothing extra limited partnerships are required to do as these new measures will not be implemented straight away as there is still secondary legislation yet to be passed. Once these measures are introduced, there will be a 6-month transitional period from the commencement of the legislation.
Changes to Companies House Fees
Companies House have also announced that they are increasing their fees to recover the costs of these new powers being introduced. The fee for filing a confirmation statement online is going from £13 to £34. The full list of the price changes is available here https://changestoukcompanylaw.campaign.gov.uk/changes-to-companies-house-fees/
To discuss these changes to UK Company Law and how it will affect you and your company, please do not hesitate to get in touch with the team at PFM Dental Accountancy.
