How will the reforms from the Economic Crime and Corporate Transparency Act 2023 impact your business?

On 26^th October 2023, the Economic Crime and Corporate Transparency Act 2023 (EECTA) received Royal Assent and became law.

Hailed as some of the most significant reforms to Companies House since its establishment, the ECCTA introduces wide-ranging reforms to Companies House. The aim is to combat fraud and corruption by improving transparency over UK companies and other legal entities.

Although this may seem far removed from your day-to-day working life and business management, these reforms could have an important impact on your business if you are incorporated. It will redefine how and what information your business shares with Companies House.

Jess Field, Paralegal in the Corporate and Commercial team, explains more…

What do the ECCTA reforms include?

The reforms include:

• introducing mandatory identity verification for both new and existing registered company directors, People with Significant Control, and those delivering documents to the Registrar.
• broadening the Registrar of Companies House’s powers including power over company creation and ensuring the reliability and accuracy of data reflecting the latest advancements in digital technology.
• providing Companies House with more effective investigation and enforcement powers, together with the ability to share information with law enforcement bodies.
• enhancing the protection of personal information provided to Companies House to protect individuals from fraud and other harms.

What does this mean for your business?

Some of the changes you can expect as a company:

• all your directors, PSCs and those sending documents to Companies House will have to complete an ID verification process.
• you will have to have a registered email address which you will be under a duty to maintain. Companies House will be able to use this email to contact you.
• you will not be able to hold your register of members centrally at Companies House.
• you will no longer be required to keep your own, register of directors, register of directors’ residential addresses, register of secretaries or register of people with significant control (PSC register).
• the filing requirements of accounts and reports for micro-entities and small companies. Micro-entities must now deliver annual accounts and small companies must deliver annual accounts together with a director’s report.

Many of these changes need system development and the passing of secondary legislation. This means they won’t be introduced for a while and includes measures such as identity verification. However, Companies House have advised that some could come into force in early 2024. Businesses therefore need to be ready for the start of the implementation of these changes.

At Coodes, our team will be keeping a close eye on these changes and will keep all of our clients up to date. If you’re not sure how this new law could impact you or your business, Coodes is here to offer personalised advice. You can reach out to Jess Field, Paralegal in the Corporate and Commercial team via email or by calling 01326 214025.