Updates: Economic Crime & Transparency Act 2023

COMPANY LAW BLP UPDATES 2024 –  The Economic Crime and Corporate Transparency Act 2023.

The Economic Crime and Corporate Transparency Act 2023 introduced some reforms to the Companies Act 2006 (CA).

Key practical points relevant to Business Law and Practice are summarised below:

•  Introduction of identity verification for all new and existing company directors, PSCs and those delivering documents to the Registrar.

New verification process in new sections 1110A and 1110B CA – Identity to be verified by the Registrar or by an ‘authorised corporate service provider’ approved by the Registrar of Companies. Regulations will be introduced to detail the new verification procedure, with transitional arrangements for existing individuals.

• Removing the need for the company to keep all company registers, save for the register of members (without the option for the company to elect for the register to be kept centrally).

Proposed removal of the requirement to keep all company registers, save for the register of members. The register of members will have to be kept by the company, rather than relying on the centralised register at Companies House.

Therefore, there will be no requirement to keep a register of directors, register of directors’ residential addresses, register of company secretaries, or the PSC register (whether centrally or otherwise). A register of charges has always been optional.

• Additional provisions to improve transparency, support national security and combat economic crime.

Broadening the powers of the Registrar of Companies on company formation and as to information held by Companies House.

For example:

• All companies must have an ‘appropriate’ email address registered with Companies House.
• Provisions and powers on company names (restricted names and powers of the secretary of state to order a change of name will be wider).
• A company’s registered office should be at an ‘appropriate’ address.
• More detailed information will need to be provided both on and following changes after incorporation (e.g. appointment of a new director).
• Providing Companies House with more effective investigation and enforcement powers, permitting sharing and cross-checking of data.

• Proposed consequential changes to forms to accommodate the changes, including form IN01.

For example, a new form will be required to change a company’s registered email address. Other forms will also need changing to account for changes to/additional information required (e.g. AP01 to notify Companies House of the appointment of a director).

• Enhancing the protection of personal information provided to Companies House to protect individuals from fraud and other harms.

New section 120A of CA – Allowing secretary of state to make regulations requiring a company to refrain from using or disclosing individual membership information except in specified circumstances, where an application to the Registrar is made to request this.