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The new UK Company Law Requirements – What you need to know
Important changes to UK Company Law came into effect on the 4th of March 2024, as part of the UK’s Economic Crime and Corporate Transparency Act 2023 (EECTA).
The EECTA represent an overhaul of the UK government’s framework for tackling economic and financial crime and gives greater power to Companies House to query, challenge or remove company information which appears to be incorrect or inconsistent.
It is therefore crucial corporate governance professionals, corporate secretaries and in-house legal teams are aware of these new requirements, ensure all past and present information submitted to Companies House is accurate and any inaccuracies are addressed immediately.
Here we provide a summary of the new requirements introduced as of 4th March 2024 and look towards future changes:
What’s changed?
1. Registered office address
Companies must ensure their registered office address is at all times an ‘appropriate address’. An appropriate address is somewhere where (1) if a document is delivered, it would be expected to come to the attention of a person acting on behalf of the company and (2) delivery is capable of being recorded by obtaining an acknowledgement of delivery.
Companies will no longer be able to use a PO Box as their registered office address but will able to use a third-party agent’s address, provided it is an ‘appropriate address’.
Action point: Check your company’s registered addressed is an ‘appropriate address’. If not, you’ll need to change it and inform Companies House. Consider putting in place internal processes to periodically review the appropriateness of the registered office address.
2. Statement of lawful purpose
Upon registering or ‘incorporating’ a company, the subscribers to the company will have to confirm they’re forming the company for a lawful purpose. Existing companies will also be required to confirm their intended activities are lawful, on their annual confirmation statement.
A company will not be able to file an annual confirmation statement without confirming a statement of lawful future activities of the company.
Action point: Ensure a ‘statement of lawful purpose’ is included in your next confirmation statement filed at Companies House on or after 5 March 2024. This will be available through a check box on the revised confirmation statement form.
3. Registered email address
All companies must provide a registered ‘appropriate’ email address. Companies House will use this email address to communicate with the company – it will not be available to the public.
An email address is deemed ‘appropriate’ if emails sent to it by the Registrar come to the attention of a person acting on behalf of the company. This email address does not have to be in the company domain name and companies will be allowed to use the same email address for multiple companies.
Action point: Ensure you have an ‘appropriate’ registered company email address. This address should be accessible to several company representatives to ensure the inbox is regularly monitored and no communications from Companies House are missed.
What’s coming up?
1. Identify Verification
Anyone setting up, running, owning, or controlling a company in the UK will soon need to verify their identity to prove they are who they claim to be. Anyone acting on behalf of a company will also need to verify their identity before they can file information with Companies House.
Individuals and Companies will be able to verify directly with Companies House, or through an authorized agent.
Further guidance on when these changes will come in to effect and how the identify verification process will work is expected in 2024.
2. Software Only Filings
As part of the journey to modernize and digitize filing routes, Companies House will transition towards filing accounts by software only. All companies will need to find suitable software before web-based and paper filing options are no longer available. The move to filing accounts by software only will be phased in over the next 2 to 3 years.
3. Fees Increase
From the 1st of May 2024, Companies House will be increasing its fees. The new costs will affect the likes of incorporation, a change of name, confirmation statements, re-registration of a company and other services.
The risk of non-compliance
- Non-compliance may lead to a financial penalty, an annotation on the company’s record or prosecution.
- Non-compliance is an offence committed not only by the company but every officer of the company who is in default
- Should Companies House not be satisfied with a company’s registered office address they will change to a default address held at Companies House. The company must provide an appropriate address with evidence of proprietary ownership within 28 days, or Companies House could start the process to strike the company off the register.
Ieva Fakanle
Senior Legal Officer, Mercator by Citco, Citco London Ltd.