The U.K. Economic Crime and Corporate Transparency Act’s New Responsibilities for Companies

March 1, 2024

On 26 October 2023, the Economic Crime and Corporate Transparency Act 2023 became law. The new U.K. law is designed to fight corruption, money laundering and fraud, has major implications for businesses and will engender major reforms to Companies House.

From 4 March 2024, the first phase of changes will be implemented, which will include the following:

1. Registered Office Address

Companies must have an appropriate address, without which Companies House may commence strike-off proceedings. An “appropriate address” is one where any documents sent to said address should come to the attention of a person acting on behalf of the company and can be recorded by an acknowledgement of delivery.

P.O. boxes can no longer be used as a registered office address. Third-party agents’ addresses can still be accepted if they meet the above conditions for an appropriate address.

2. Registered Email Address

New companies must provide a registered email address when they incorporate. Existing companies must provide a registered email address when filing their next confirmation statement on or after 5 March 2024. The same email address can be used for more than one company.

Companies must maintain an appropriate registered email address in the same way as their registered office address. An email address is “appropriate” if, in the ordinary course of events, emails sent to it by the registrar would be expected to come to the attention of a person acting on behalf of the company. Noncompliance will be an offence.

3. Lawful Purpose Statement

Shareholders of new companies must confirm upon incorporation that they are forming the company for a lawful purpose. Existing companies must make their lawful purpose statement when filing their next confirmation statement on or after 5 March 2024.

4. Enhanced Powers of Registrars

The registrar will have greater powers to:

  1. query and challenge information that appears to be incorrect or inconsistent;
  2. remove inaccurate, incomplete, false or fraudulent information more quickly;
  3. conduct stronger checks on company names, which may give a false or misleading impression to the public;
  4. annotate the register to inform users about potential issues with the information; and
  5. clean up the register, using data matching to identify and remove inaccurate information.

If a company does not respond to Companies House’s formal request for more information, consequences could include financial penalty, annotation on the company’s record or prosecution.

Other measures to be introduced in later phases will include:

  • From 1 May 2024, fees for incorporation and registration will increase. A full list of the new Companies House fees is available here.
  • A new identity verification process for directors, people with significant control and anyone acting on behalf of a company to complete before incorporation or filing.
  • Transition toward filing accounts by software only.

For queries, please contact a member of the McGuireWoods London corporate team.