The implementation of the Economic Crime and Corporate Transparency Act marks a significant transition in the UK’s corporate regulatory environment.
This document aims to provide a comprehensive summary of the key changes anticipated over the next few years under this new legislation.
Below you’ll find overviews for each significant change that will affect businesses in the UK.
Enhancing Data Integrity on Official Registers
Commencing in March 2024, Companies House will be empowered with enhanced authority to scrutinise and query the information submitted to it.
This includes implementing more rigorous verification processes for company names, establishing new criteria for registered office addresses, and introducing mandatory lawful purpose statements. These measures are designed to improve the accuracy and reliability of the data held on UK company registers.
Mandatory Identity Verification for Company Affiliates
A pivotal change is the introduction of compulsory identity verification for individuals involved in setting up, operating, owning, or controlling a company in the UK.
This measure aims to bolster security and trust in business operations, ensuring that all key personnel associated with UK companies are appropriately identified and verified.
Transition to Digital Accounting Practices
In a significant move towards digitalization, the new law mandates the transition towards the exclusive use of software for filing accounts.
Additionally, there will be alterations to the filing options available to small companies, reflecting a broader push towards modernising and streamlining financial reporting processes in the UK corporate sector.
Updated Requirements for Confirmation Statements
Effective from March 2024, there will be new stipulations regarding confirmation statements. Companies will be required to provide a registered email address and confirm that their future business activities will comply with legal standards.
This initiative is part of an effort to enhance transparency and accountability in corporate declarations.
Revised Fee Structure at Companies House
The legislation also introduces changes to the fee structure at Companies House. These adjustments aim to account for anticipated future expenditures and ensure that the costs of existing services are adequately recovered.
The revised fees reflect a commitment to maintaining a financially sustainable and effective regulatory framework.
Protective Measures for Personal Information
In response to growing concerns about privacy and data protection, the new law provides individuals with the option to request the suppression of their personal information from historical documents.
Additionally, there are provisions for individuals to seek protection of their personal details from public disclosure in situations where there is a risk of harm.
Regulatory Changes for Limited Partnerships
Limited partnerships will face more stringent regulatory requirements. These include the obligation to file information through authorised agents and the need to submit more comprehensive information to Companies House.
These measures are intended to enhance oversight and transparency in the operation of limited partnerships.
Increasing Transparency in Company Ownership
A significant aspect of the new legislation is the requirement for companies to provide additional information about their shareholders.
There will also be restrictions on the use of corporate directors, aimed at improving the transparency and accountability of company ownership structures.
Enhanced Powers for Investigation, Enforcement, and Data Sharing
Finally, the Act empowers Companies House with more robust investigative and enforcement capabilities. Additionally, it grants new powers for the sharing of data with law enforcement agencies and other government departments.
These measures are designed to strengthen the regulatory framework and enhance cooperation between different arms of the government in corporate oversight.
If you want to know exactly how these changes may affect you, or would like more details about specific changes, get in touch with us today.
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