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March 4th – New Law for Companies
The amendment of the company law by
the British regulator is the largest comprehensive package of changes
introduced in recent years. The intention of the creators of the Economic Crime
and Corporate Transparency Act was to strengthen the system in terms of
transparency and reliability of information stored in public registers. All
these steps are intended to increase the certainty of transactions in the
British economy, provide greater security for market participants, and give new
tools to fight economic crime to public institutions.
Proactive Companies House
Under the amendment to the company
law, the official register of economic entities, Companies House, will gain new
competencies. You can expect an increase in the number of contacts with
representatives of the register in the future, as well as an extension of the
processes related to the registration of new entities. What new actions will
the Companies House be able to take from March 4th?
1.
Independent Data Verification – Companies House has been granted the authority
to analyse all new information for its compliance with the data already in the
register. Moreover, officials will be able to challenge the data submitted by
the company (and call for its completion), or even reject applications that are
inconsistent with archival data.
2.
Counteracting Misuse of Company Names – Misuse of company names will be eliminated,
and names that could mislead will be subject to more comprehensive checks.
3.
Annotations Made in the Company’s Register Entry – The Chamber will be able to post
official “comments” on a company’s register entry, visible to every
stakeholder. The purpose of the annotations is to increase pressure on
companies to provide explanations or highlight potential issues related to the
information provided by the company.
4.
Removal of Company Registrations – In strictly defined legal cases, officials
will be able to decide on the removal of an entry from the register, for
example, when a company does not have a proper address, like a PO Box.
5.
Identity Verification – A new identity verification system is intended to discourage the use
of corporate legal personalities for illegal activities. The requirement of
identity verification will cover all individuals establishing, owning,
conducting, or controlling a company, or a Limited Liability Partnership (LLP).
Changes for Companies Registered with
Companies House
To improve the quality of data
collected in the Companies House register, the Economic Crime and Corporate
Transparency Act has imposed an obligation on companies to complete a series of
data entries. Failure to fulfil this obligation by March 4th may constitute
a basis for deregistering the company from the register and may even carry
legal consequences. The act of removing a company from the register will be
considered as grounds for suspecting the commission of a crime.
1. Proper Address – If physical documents for the
company are sent to this address, the sender has the right to assume they will
reach a person acting on behalf of the company. This change aims to prevent
situations where important documents do not directly reach the recipient.
2. Proper Email Address – If electronic documents for the
company are sent to this address, the sender has the right to assume they will
reach a person acting on behalf of the company. This change is intended to
prevent situations where important documents do not directly reach the
recipient.
3. Declaration of Legal Business
Activity – All
enterprises will be required to make a statement that their activities are and
will be conducted in accordance with the law. This is an additional
declaration that is an annex to the confirmation statement, which companies are
obligated to submit to Companies House every year.
A significant innovation for
companies will also be the completion of the implementation work on the new IT
system of Companies House. Along with the new system, there will be an
obligation to submit reports online, such as the applications, annual
financial statements of companies, and for enterprises within the SME (Small
and Medium-sized Enterprises) group, also the profit and loss account.
New Fees at Companies House
The regulatory changes are also accompanied by an update to the
Companies House administrative fee schedule, which will come into effect on
01.05.2024. We recommend that all necessary formalities related to updating
your company’s entry be completed before the date to avoid additional costs –
and to promptly fulfil new statutory obligations. You can familiarize yourself
with the new fee schedule at this link:
https://changestoukcompanylaw.campaign.gov.uk/changes-to-companies-house-fees/
