The Economic Crime and Corporate Transparency Act 2023: first changes set to be introduced

Set out below is an overview of the changes that will be introduced and the steps companies may wish to consider to ensure that they remain compliant.

1. New rules for registered office addresses: the registered office address recorded at Companies House must be “appropriate”. This means that documents sent to the registered office address (i) should come to a person acting on behalf of the company; and (ii) can be recorded by an acknowledgement of delivery. PO boxes will no longer be accepted as registered office addresses.

Companies House have made it clear that they will act against companies who do not have an “appropriate” registered office address. Notably, the provisions allow Companies House to change an inappropriate address to a default address. If the company then fails to notify a new and “appropriate” registered office address within 28 days, Companies House may commence strike off proceedings.

Action: Existing companies that currently rely on a PO box address should change their registered office address and update Companies House before 4 March 2024.

2. New requirement for a registered email address: all companies will be required to provide an “appropriate” registered email address. Companies House will use this email address to communicate with the recipient about their company, this email address will not be publicly available. An email address will be “appropriate” if emails sent to it by Companies House would be expected to come to the attention of a person acting on behalf of the company.

This change means that any company incorporated after 4 March 2024 must provide a registered email address upon incorporation. Existing companies will also need to provide a registered email address when they file their next confirmation statement; this will apply to confirmation statements with a statement date on or after 5 March 2024. Going forward, companies have a duty to maintain an appropriate registered email address, in the same way that they do for a registered office; failure to do so is an offence.

Action: Existing companies and those incorporating new companies should ensure that they have identified an appropriate email address ahead of the 4 March 2024 implementation date.

3. New requirement for a “lawful purpose” statement: the subscribers of any incorporated from 4 March 2024 will be required to confirm that they are forming the company for a lawful purpose.

Existing companies must also confirm on their annual confirmation statement that that its future activities will be lawful; this will apply to confirmation statements with a statement date on or after 5 March 2024.

Action: always comply with the law!

4. Stronger checks on company names: Companies House will have broader powers in relation to company names, including the power to prohibit names (current or proposed) which could be used to facilitate crime, this includes names suggesting a non-existent connection to a foreign government or institution or names which include computer code.

Where a company name may give a false or misleading impression to the public, stronger checks will be carried out; it seems likely that this will apply to both existing and newly incorporated companies.

Action: ensure that company names meet the new requirements, if necessary, take appropriate steps to change an existing company’s name.

5. Enhanced powers for the Registrar: Companies House will have greater powers to query information that appears to be incorrect or inconsistent. In some cases, Companies House will be able to clean up the register and to remove information they have reason to believe is inaccurate, incomplete, false or fraudulent.

Companies House has also confirmed it will take a more robust approach to dealing with information that is provided to it both before and after it is accepted and published on the register. In taking steps to clean up the register, Companies House will begin using data matching to identify and remove inaccurate information. It is too early to say where Companies House will focus its attention, how it will use data matching to identify potential errors or how potential discrepancies will be communicated to companies. However, Companies House also has a new power to annotate the register when information appears confusing or misleading; this will flag known potential issues to users.

Companies House will also be able to query information already on the register before these measures came into effect. A “query” will start with a request for more information and supporting evidence. Companies that are asked for additional information by Companies House should be prepared to respond quickly. If the case escalates to a formal “query” for information and a company still does not respond, this will be a criminal offence and the consequences could include a financial penalty or prosecution. Companies House has confirmed it will give a company 14 days to respond to a formal query.

When Companies House identifies false, misleading or incorrect information, it will also be able to remove it from the register more quickly than it can at the moment. This may avoid the need for companies to apply to court for orders to remove duplicated or erroneous material from the register.

Finally, Companies House will also be sharing data with other government departments and law enforcement agencies.

Action: Given the broader powers that Companies House will have, existing companies should review information already filed with Companies House for inconsistencies and where appropriate make necessary filings. Companies House are already actively reviewing documents to ensure consistency in registered information and a higher degree of accuracy. For example, Companies House will now reject a document if there is a simple typographical error in the name of the company in the text.

If you would like further information on the changes that ECCTA will introduce, you can read our summary of the key changes, further information is also available on the Companies House blog.

We will publish further briefings to help you understand your obligations under ECCTA as further commencement dates are announced. In the meantime, if you have any questions, please reach out to your usual contact at Lewis Silkin.