Changes to UK company law and what it means for you
The recent Economic Crime and Corporate Transparency bill marks a significant milestone, ushering in a new era of governance and transparency for Companies House. But what does it mean for your business?
In its pursuit of data excellence, Companies House is aiming to improve the quality of financial information on the register.
By embracing the latest advancements in digital technology, the agency aims to provide a more accurate and reliable reflection of the financial health of businesses. These changes will empower entrepreneurs and decision-makers, enabling them to make more informed choices when conducting business.
What is the purpose of the new bill?
At its core, this development promises not only to enhance the reliability of corporate data but also to disrupt economic crime and foster economic growth. Companies House is committed to these objectives and excited about the changes ahead.
For companies operating in the UK, the bill means an increased assurance that company data, financial information, and personal details are better safeguarded.
By holding companies to higher standards of data accuracy and integrity, this bill creates an environment where individuals can have more confidence in the reliability of corporate data. Additionally, the improved privacy protection measures offer greater security against fraud and other malicious activities, ultimately ensuring a safer and more transparent business landscape for everyone.
While the bill’s direct impact may not be immediately evident, these changes set the stage for a more secure and trustworthy economic environment that benefits us all.
Strengthening data integrity
The new law introduces a range of measures that empower Companies House to maintain the highest data quality standards. Identity verification will be introduced for all company directors, individuals with significant control, and those filing on behalf of companies.
This enhancement in authentication will significantly bolster the accuracy and reliability of the information on the register. As part of this effort, Companies House will become more proactive gatekeepers, ensuring that only genuine and accurate data finds its place into the records.
Consequently, it’s important to stay on top of your company secretarial duties and keep your business records accurate and up-to-date.
Protection of personal information
One of the core responsibilities of Companies House is safeguarding personal information. With the new legislation, Companies House has expanded its powers to enhance the protection of individuals’ data, shielding them from potential fraud and other forms of harm.
This step will make a significant difference in protecting the privacy of companies and company directors.
Four new objectives
As part of its commitment to the new era of corporate governance, Companies House has adopted four new objectives:
- ensuring the proper delivery of documents in the registrar
- maintaining an accurate and comprehensive register
- preventing any misleading or false impressions in public records
- preventing companies from engaging in unlawful activities.
The agency’s decisions and actions will align closely with these objectives, helping it to drive positive change and protect the interests of businesses and the public.
What to expect
Now the bill has become law, you may wonder how this will affect your company’s interactions with Companies House. Some changes, such as identity verification, will not be immediate and will require system development and secondary legislation before implementation.
However, Companies House plans to introduce several early measures in 2024 to enhance transparency and the reliability of information on the registers.
These initial measures include:
- Enhanced scrutiny: Companies House will have greater powers to query information and reject data that appears incorrect or inconsistent with existing records, with some data potentially being removed.
- Stronger checks on company names: Stricter rules on company names will be introduced.
- Registered office addresses: Companies will be required to maintain an appropriate address at all times, eliminating the use of PO Boxes.
- Registered email address: All companies will be required to provide a registered email address.
- Confirmation of lawful purpose: When incorporating, companies must confirm that their future activities will be lawful, with annual confirmation statements to this effect.
- Annotations and data clean-up: The register will contain annotations for potential data issues, and Companies House will use data matching to identify and remove inaccurate information.
- Data sharing: Companies House will cooperate with other government departments and law enforcement agencies, improving the exchange of relevant information.
In early 2024, Companies House plans to raise some of its fees. It is important to note that these fees are established on a cost recovery basis, and even after the increase, its fees will remain among the lowest globally.
These changes are, however, necessary to ensure that the agency can continue to provide efficient and reliable services.
A bright future
With enhanced data reliability, transparency, and privacy protection, Companies House aims to make a genuine difference in combating economic crime, supporting economic growth, and promoting fair and ethical business practices.
Elevated data reliability, transparency, and privacy protection, will deliver substantial advantages to business owners. Furthermore, as the reliability of financial data improves, you will gain a more solid foundation for making informed business decisions. In essence, the new bill empowers business owners by providing the tools and assurance needed to run a successful, growth-oriented, and ethical enterprise.
Do you want to know how the new bill could affect you? We’re here to help you through any changes. Get in touch today.