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16 January 2024 | Comment | Article by Gerallt Jones

The Economic Crime and Corporate Transparency Act 2023 (ECCTA) Guidance


Hinna Kerai, Solicitor in the Corporate Commercial team discusses the introduction of ECCTA and the impact on all companies.

What directors, companies and shareholders need to know about the ECCTA

The Economic Crime and Corporate Transparency Act 2023 (ECCTA) received royal accent on 26 October 2023. The ECCTA sets out the biggest range of reforms of Companies House practice since the introduction of the Companies Act 2006.

These are changes that all companies need to be aware of and will require every company to take certain actions, details of which we have set out below.

Additional powers for Companies House

One of the main objectives of the ECCTA is to give Companies House wide ranging powers to ensure that:

1. The information held for companies on the public registers is accurate and not misleading.

This includes giving the Registrar the power to:

  • reject and query documents for inconsistencies
  • require additional information in relation to a filing
  • require inconsistencies on the public register to be resolved
  • remove material from the public register
  • require businesses to report discrepancies
  • analyse information for the purposes of crime prevention or detection
  • disclose information to any person or a public authority
  • change a company’s name, its registered office address and director’s service address.

2. Companies are not registered for the purpose of carrying out or facilitating unlawful activities.

This includes giving the Registrar the power to strike off a company registered on a false basis.

Verification of identification of directors and persons of significant controls (PSCs)

To minimise anonymous filings being made, all directors, PSCs and any person filing on behalf of a company such as law and accountancy firms (referred to as “Authorised Corporate Service Providers” (ACSPs) in the legislation) will be required to confirm their identity in order to submit filings. This new requirement will apply to all current and any future directors and PSCs.

 

New rules for registered office addresses

ECCTA introduces a new requirement for a company to always ensure that its registered office is an “appropriate address”. An appropriate address is where:

  • A document addressed to the company and delivered either by hand or by post would be expected to come to the attention of a person acting on behalf of the company.
  • The delivery of documents is capable of being recorded by obtaining acknowledgment of delivery.

This will mean that companies will not be able to use a P.O. Box address as their registered office address.

Registered email addresses

ECCTA introduces a requirement for all companies to maintain a registered appropriate email address. If a company fails to maintain an appropriate email address without reasonable excuse, then an offence punishable by a fine is committed by the company and every officer of the company by default.

Timeline for implementation

The date for implementation of the changes set out above has not been confirmed. However, on 3 January 2024, Companies House stated that they expect that the above changes (except for the verification of identity) to come into force in March 2024.

What you need to do to prepare for ECCTA

With March 2024 not far in the future, it is important for directors and companies to start considering the impact of the above changes. Specifically:

  • If a company has a registered office address that does not fit the new criteria, consider changing the registered office address prior to the implementation of relevant provisions of the ECCTA. All companies with a P.O. Box address will need to change their registered address to a physical address.
  • Review the company’s public file and ensure that historic filings are accurate and not misleading and if there is inaccurate or misleading information on the public file, consider making rectification filings to correct the inaccurate or misleading information.
  • Although the proposed implementation date for the verification of identity provisions has not been announced, directors should start broaching the subject of identification with PSCs ahead of any proposed implementation date.

Our corporate and commercial team can assist companies with a review of their historic filings, complete any filings that are required to bring the public record up to date and generally advise in relation to any other concerns that companies may have in relation to the effects of this legislation.

Author bio

Gerallt is a partner and head of the corporate and commercial team. Since joining Hugh James in 2005, Gerallt has led the team to be a leading player within the corporate and commercial market, advising clients including the Welsh Government, Princes Gate Water and the Development Bank of Wales.

Gerallt also has particular expertise in the sport and food & drink sectors, leading Hugh James’s relationships with clients in these sectors including the Welsh Rugby Union and Braces Bakery.

Disclaimer: The information on the Hugh James website is for general information only and reflects the position at the date of publication. It does not constitute legal advice and should not be treated as such. If you would like to ensure the commentary reflects current legislation, case law or best practice, please contact the blog author.

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