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Compliance and regulations | AccountingWEB | Changes to UK company law
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Changes to UK company law from 4 March

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Companies House is set to roll out the first set of measures to improve transparency over UK companies and abuse of the register, with stronger checks on company names and new rules for registered office addresses.

25th Jan 2024
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Following the Economic Crime and Corporate Transparency Act becoming law in October, Companies House announced that it is set to introduce the first set of changes to UK company law on 4 March 2024. 

Announced as the “most significant changes” in Companies House’s history, the new rules were introduced to tackle abuse of the register, such as companies set up to commit fraudulent activities, and to improve transparency over the register. 

The new changes are set for the start of March, although the introduction hinges on the secondary legislation, but that is at the will of Parliamentary timetables. However, the date will not be before 4 March.  

In October last year, after the Bill received Royal Assent, Louise Smyth, the chief executive, commented that the measures would provide the registrar of companies with “new and enhanced powers to improve the quality and reliability of our data”.

She added, “We’ll also be able to act more quickly if people tell us their personal information has been used on the register without their consent. This will make a real difference to individuals and it’s something I’m particularly passionate about.”

Changes to registered office addresses

One of the most significant changes will be to companies’ registered office addresses. 

Companies House noted that these rules will mean that companies will have to have an “appropriate address” as their registered address. Any document sent to this address should come to the attention of a person acting on behalf of the company and documents would be recorded by an acknowledgement of delivery.

This means companies will not be able to use a PO Box address as its registered address, but they will still be able to use a third-party agent’s address, although that comes with the proviso that it must still meet aforementioned registered office conditions. 

Those still using a PO Box will have to change the address by the 4 March, which they can do by using their company’s authentication code. Companies that fail to do this by 4 March could be struck off the register. 

At first, when a company is identified as having an inappropriate address, Companies House will change their current address to a default one, and then give the company 28 days to change to an appropriate one, otherwise the registrar will start the striking-off process. 

There will also be new requirements for all companies to supply a registered email address, although this information will not be available on the public register. From 4 March companies will have to give a registered email when they incorporate, while existing companies will have to give a registered email when they next submit a confirmation statement from 5 March.  

Greater powers to scrutinise

The first set of changes will also include greater powers to query information and request supporting evidence. 

This means stronger checks on company names, which has been a longstanding problem, with fraudulent companies set up with owners named Mickey Mouse, Donald Duck and Adolf Hitler previously waved through. 

The new rules will also put more onus on directors to make declarations of their lawful intentions. As such, companies will have to confirm that they’re forming the company for a lawful purpose when they incorporate. Companies will then have to state on their confirmation statement that its intended future activities will be lawful. 

Part of the motivation behind the new rules is to equip Companies House with more quality data. The registrar of companies said the changes from 4 March will take the first steps to cleaning up the register, where it will use data-matching to identify and remove inaccurate information. 

By having a more reliable source of information on the owners behind them, Companies House will be sharing data with other government departments and law enforcement agencies.  

The bill also empowers Companies House with the ability to annotate the register when information appears confusing or misleading. 

Filing shake-up

What is currently not included in the list of new measures is the requirement for small companies and micro-entities to file a full profit and loss account, which will then be available on the public register. Further information on that aspect of the bill will be released after secondary legislation and the finalisation of the implementation programme. 

Companies House has said that the Economic Crime and Corporate Transparency Act will be implemented in phases, with timing of certain measures being dependent on a number of factors, including delivery of the necessary secondary legislation programme.

But the changes to small companies and micr-entities filing are tentatively planned to come into force in 2026.

A Companies House spokesperson told AccountingWEB: “The requirements for a profit and loss account will be set out in Regulations and we will ensure companies are given fair warning of the changed expectations. 

"We remain committed to improving the quality and value of the information on the register without unduly increasing the burden on small and micro companies.”

The impact of the Companies House reforms for accountants will be the subject of a session at the Festival of Accounting & Bookkeeping, with financial reporting expert Steve Collings reviewing the main changes for practitioners. 

Replies (9)

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paddle steamer
By DJKL
25th Jan 2024 20:12

My only reservation is the e mails- whilst not on the register available to the public once Companies House have been hacked..............

Thanks (3)
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By FactChecker
25th Jan 2024 20:37

It's not the rules, it's the lack of policing of them (which isn't set to change noticeably).

How will "This means companies will not be able to use a PO Box address as its registered address, but they will still be able to use a third-party agent’s address"
... lead to any reduction in (let alone full eradication of) the thousands of companies registered using the home address (but without their knowledge) of unconnected people living in parts of South Wales?

Thanks (6)
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By Deez Nuts
26th Jan 2024 08:56

How many companies with PO box registered offices are likely to change from the default address provided before striking off action is concluded?

Out of curiosity I looked up "Adolf Hitler" on companies house. Quite the filing history for SPYPRIEST LTD (12411673).

Thanks (6)
Replying to Deez Nuts:
Pile of Stones
By Beach Accountancy
26th Jan 2024 11:41

I especially like the choice of asset values...

Thanks (1)
Replying to Beach Accountancy:
paddle steamer
By DJKL
20th Feb 2024 17:56
Thanks (0)
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By Truthsayer
26th Jan 2024 14:55

'companies will have to confirm that they’re forming the company for a lawful purpose when they incorporate. Companies will then have to state on their confirmation statement that its intended future activities will be lawful.'

This is a waste of everyone's time, obviously. Do they think that crooks will be deterred by having to lie?

Thanks (4)
Replying to Truthsayer:
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By steve 12321
21st Feb 2024 20:10

I think it may make them laugh!

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By dmmarler
29th Jan 2024 09:50

These problems seem to have proliferated since the Companies' Act 2006 changes - did anyone listen to the professional feedback when it was drafted? I suspect not. Just the same as MTD. Why have consultations when no-one wants to hear the outcome?

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By Paul Crowley
20th Feb 2024 17:23

'The new rules will also put more onus on directors to make declarations of their lawful intentions. As such, companies will have to confirm that they’re forming the company for a lawful purpose when they incorporate. Companies will then have to state on their confirmation statement that its intended future activities will be lawful.'

Well that would definitely catch out Baldrick.

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