New investigative and enforcement powers created under the Economic Crime and Corporate Transparency Act 2023 (‘the ECCTA’) came into force on 4 March 2024.

 

What you need to know

The ECCTA gives Companies House new and enhanced powers to improve the quality and reliability of its data and to confront misuse of the companies register. The new legal measures coming into force include:

  • More powers for Companies House to query and challenge the information it holds where it appears to be incorrect
  • Tougher checks on company names that give a false or misleading impression to the public
  • Use of a PO Box as a company’s registered address is now prohibited (companies will require to have an ‘appropriate’ address where documents can be delivered by hand, or post, and be capable of being recorded by obtaining an acknowledgment of delivery)
  • All companies must supply a registered email address
  • All subscribers to a company must confirm that they’re forming a company for a lawful purpose
  • Companies must confirm their intended future activities will be lawful on their annual confirmation statements
  • There are additional powers for Companies House to tackle and remove factually inaccurate information, and to share data with other government departments and law enforcement agencies

In addition, new criminal offences and civil penalties are created which complement the new measures. Penalties for non-compliance include fines, an annotation on a company’s record, and criminal prosecution.

 

Comment

This is a seismic shoring up of Companies House and its role as a regulator. Historically, Companies House has had more of an administrative than enforcement role because of its limited enforcement powers. However, this has now changed.

Going forward, the raft of investigative and enforcement powers that have taken effect will almost certainly result in an increased appetite for Companies House to scale up its presence in the regulatory enforcement space. Companies and company directors will need to consider these new powers carefully and should no longer rely on previous practice in order to remain compliant.

For more information on this or any other regulatory matter, please contact Greg Smith on T: 0141 473 5766 or E: Gregor.Smith@h-f.co.uk

Companies House ECCTA Economic Crime and Corporate Transparency Act 2023