From 4th March, the powers that Companies House has updated and enhanced powers to monitor data quality and reliability.
They’ve done this to deal with cases of misuse of the companies register.
So what’s changing?
The changes include:
- Companies House now have greater powers to raise queries about the information they’re sent and if they think it’s necessary, they can ask for further information.
- All companies now have to include a registered email address
- Subscribers need to confirm the lawful purpose of their company when it’s incorporated and on the confirmation statement they send in, they need to state that any intended future purposes will also be lawful
- Companies House will get stronger powers to investigate and then remove any information that isn’t factually accurate
- They can now share data with law enforcement agencies and other government departments.
Rules for registered office addresses
It’s now the rule that a company’s registered office must be what’s called an ‘appropriate address’ at all times. This means:
- any documents sent there should be received by a person acting on behalf of the company
- any documents can be recorded by an acknowledgement of delivery, meaning someone will have to be there to confirm the documents have been safely received
This means that a PO Box can’t be used as a registered office address, although a third-party agent’s address is acceptable, as long as it answers both conditions listed above.
Companies that don’t have an appropriate address could end up being struck off the register.
If, during the course of their enquiries, Companies House find a registered office address isn’t appropriate, they will change it to a default address, and the business then has 28 days to provide an address in the required format, with evidence to prove it is legitimate.
If this isn’t provided within the time limit, Companies House will start the process of striking the company off the register.
Company names
If Companies House receive an application to register a name, but they believe that it’s intended to facilitate fraud, has a computer code in it or may lead people to believe that the company is somehow connected to a foreign government or an international organisation, they can reject that application.
They can also issue an order for a company to change its name, and if the company doesn’t comply with that order within 28 days, a new name can be imposed.
While Companies House is waiting for a response to the order to change the company name, it can also remove it from the register altogether.
If no answer is received to the order within the 28-day time limit, Companies House will treat that as an offence.
If a company pays no attention to a name change order and carries on using the original name, that will also be an offence.
These new measures need to be taken very seriously as they will be backed up by new criminal offences and civil penalties.
What are the new measures for?
Companies House explained that the measures were needed to deal with a rise in the instances of criminals misusing UK companies commit fraud, money laundering and other forms of economic crime.
The process of tightening the rules is focussing first on cases where there isn’t consent for the use of names and addresses of individuals.
Under the new system, it’s going to be much quicker to report and remove personal information if someone is misusing it.
To make sure that this doesn’t cause problems for legitimate businesses, the new changes will be phased in to synchronise with existing reporting timescales, including the need to update a company confirmation statement.
The Act also contains other measures, such as identity verification and accounts reform. However, it’s intended that these will be introduced over the coming months and years. Our blog post and the legislation itself provide more detail on these.
Businesses are advised to keep an eye on The Companies House website where more information will appear when relevant.
Increases to fees
From May 2024, Companies House put up its fees to take into account the increase in costs of providing their services.
For more details about this, see the Companies House website.
What you need to do
The law will be changing over the next few months as more powers from the Act come into force. You need to make sure you know what you need to be aware of so you can protect your business from any legal problems.
The legal teams at rradar watch out for changes in company and corporate law to ensure that you are always aware of the latest legal position regarding you and your business.
From advice to help with documents, rradar covers everything from compliance to managing trading relationships and business growth, helping you to overcome risk and keep your business moving forward. Visit the rradar specialist Corporate and Commercial legal team page here.