UK Company Law Changes

Whilst the Economic Crime and Corporate Transparency Act became law in October 2023, we are only now beginning to see the changes being introduced as part of this. If you are trading through a Limited Company, Limited Liability Partnership (LLP) or similar, you will need to be aware of the following updates. Emma Clifton, Business Advisory Associate Partner, explains the changes that you can expect to see.

If you are a Company Director, Person with Significant Control of a Company (PSC) or anyone that files on behalf of a Company, you will now have additional responsibilities to add to your ever-growing list!

The first set of changes have already begun to take effect, with changes to Confirmation Statements coming in from 4 March 2024. These changes are summarised below:

• All Companies are required to provide a registered email address on all Confirmation Statements filed after 5 March 2024. Companies House will use this email address to communicate with the Company, but they have confirmed that this will not be available on public record.
• The form includes a statement to confirm that the intended future activities of the company will be lawful. This will need to be confirmed each year and you will not be able to file the Confirmation Statement without this. This also cames into effect for all Statements filed after 5 March 2024.
• Both of the above changes will also apply to all new companies incorporated from 4 March 2024.

From 4 March 2024, companies must have an ‘appropriate registered office’ address. This is one where any documents that are sent to this address should be expected to come to the attention of the person acting on behalf of the company and can be recorded by an acknowledgement of delivery. This effectively removes the ability to use a PO Box as a registered office address.

The last of the immediate changes that came into effect on 4 March 2024 gave the Registrar greater powers to query and challenge information that is inconsistent with the data that is currently held. This should actually be a positive change as it will enable them to remove false, inaccurate or fraudulent information on a timelier basis.

Unfortunately, this is not the end of the changes, and it has been confirmed that Companies House will be increasing their fees with effect from 1 May 2024. The following table details the main changes:

A full list of all changes, including LLPs and other entities, can be found on the Companies House website using the following link Changes to Companies House fees – Changes to UK company law

Lastly, it is expected that the following changes will also come into effect, although at this stage the timings have yet to be confirmed:

• ID Verification. All Directors and PSCs will be required to completed identity verification. It is expected that a transition period will come into effect for all existing companies and all new incorporations will be required to complete this prior to registration. It is also expected that anyone acting on behalf of a company will also need to verify themselves.
• Accounts filing through software. Companies House will require all accounts to be filed through appropriate software, which is expected to be phased in over the next 2-3 years. This will remove the ability for Directors to file accounts directly through the Companies House website.
• Accounts disclosures. Small and Micro-entity companies will be required to file a Profit and Loss Account in perhaps the most fundamental change announced. Small companies will also be required to file a Directors’ Report.
• Audit exemption. Companies claiming audit exemption will be required to provide an additional statement on their Balance Sheet specifying which exemption is being claimed and that the Directors confirm that the company qualifies for this.
• Protection of personal information. Again, these measures will be phased in over the next 2-3 years, however individuals will have the ability to suppress personal information including residential address, day of birth, signature and business occupation.
• Transparency of company ownership. When these measures are brought it (yet to be confirmed) companies will be required to record the full names of shareholders (whether an individual or corporate member) within their registers. These details will then be provided to Companies House in a one-off full shareholder list to hold on file.
• Companies House will request and publicise more information from companies claiming exemption from providing a PSC, including the reason for the exemption. They will also request and publicise the conditions that allow a relevant legal entity (RLE) to be recorded as a PSC.

The following changes are specific to Limited Partnerships: –

• When the changes are brought into force, an LP must provide all partners’ names, dates of birth and residential addresses, as well as verify the identity of general partners.
• An LP will also be required to provide a registered office address within the UK and a Standard Industrial Classification code (SIC), in line with Limited Companies.
• By bringing in the above changes, it will allow Companies House to mandate the filing of Confirmation Statements for LPs.

Please reach out to Emma if you have any questions on the above or would like to discuss this further by calling 0330 058 6559 or emailing hello@scruttonbland.co.uk ,  also look out for future articles to confirm more details on the above when they are announced.