This is the send tranche of changes aimed at tackling economic crime and follows the recent changes seen with the new Register of Overseas Entities brought in by the Economic Crime (Transparency and Enforcement) Act 2022.

The bill has three main objectives: –

• Prevent companies from being abused by criminals
• Strengthen law enforcement’s ability to tackle crime
• Improving reliability of data at Companies House

Subject to the finalising of the legislation, some of the key changes that will affect companies and Companies House will be: –

Directors

• Applications to register a company will include statements confirming that the proposed directors of a company have verified their identity and none of the proposed directors are disqualified or otherwise ineligible to be a director.
• Individuals must not act as Directors unless their identity has been verified and a company must ensure that the individual must not act as Director unless their identity has been verified.
• It will be an offence for an individual to act as a director unless the company has notified the Registrar of Companies of the director’s appointment within 14 days of their appointment.
• Applications to register a company will a include a statement to confirm that none of the proposed company’s subscribers is a disqualified director.

Registered Office and Registered Email Address

• A requirement for a company’s registered office to ensure at all times that is has “an appropriate address”. This means, an address where, in the ordinary course of events, a document addressed to the company, and delivered there by hand or by post, would be expected to come to the attention of a person acting on behalf of the company, and the delivery of documents is capable of being recorded by the obtaining of an acknowledgement of delivery.
• A requirement for companies to maintain an appropriate email address so that emails sent by the Registrar of Companies would be expected to come to the attention of a person acting on behalf of the company.

Persons Of Significant Control (PSC)

• There will be new identity verification requirements for persons and legal entities with significant control. This will require each PSC to verify their identity and maintain their verified status as long as they are registered with the Registrar. It will also be a requirement for each RLE to verify the identity of their relevant officer and maintain the verified status of their registered officer as long as such RLE is registered with the Registrar of Companies

Accounts

• A requirement for micro-entities to file a balance sheet and a profit and loss.
• A requirement that small companies that do not meet the micro-entity threshold to file annual accounts and a directors’ report.
• A requirement for directors to make a statement when claiming an audit exemption, confirming that the company qualifies for the exemption.
• The removal of the option for small companies to prepare and file abridged accounts.

Finally, just to show that solicitors can’t escape the long arm of the law, there is a change to the powers of the Solicitors Regulatory Authority to enable them to fine law firms and individuals an unlimited amount for economic crime disciplinary matters, up from the rather modest current cap of £25,000.

If you would like to discuss any of the above, please do not hesitate to contact James Oxley at James.oxley@haroldbenjamin.com