7th June 2023
Since September 2022, the Economic Crime and Corporate Transparency Bill (the Bill) has been making its way through Parliament. The Bill sets out a range of measures to clamp down on the abuse of UK corporate structures and to address economic crime. The changes set out in the Bill should improve transparency by making financial information more available to the public. Whilst parts of the Bill will deal with the wider aspect of economic crime, it is primarily concerned with the regulation of UK corporate structures.
The Registrar of Companies role will also change – it will promote and maintain the reliability of the Companies House register. Due to its lack of regulatory power, Companies House is unable to investigate companies it believes may be used for money laundering or fraud. As a result, The Bill aims to enhance the Registrar’s powers, so it becomes a more active gatekeeper for company creations with more reliable data, rather than being a largely passive recipient of information, as it is now.
New Registrar powers
The Bill proposes that new powers should be introduced for Companies House to:
- Reject and query documents with inconsistencies against information already on the register, where those documents could be fraudulent.
- Remove material from the Companies House register.
- Request additional information in relation to the delivery of documents to Companies House.
- Share data with law enforcement and other public authorities where necessary.
- Impose financial penalties for those engaged in conduct amounts to an offence, under the Companies Act 2006.
- Change a company’s registered office address and take action against those who fail to provide one.
- Remove constraints on the Registrar’s ability to make rules regarding the digital delivery of documents and filings.
How will companies be affected by these new powers?
The proposals to enhance the Registrar’s powers is just one part of the wider Economic Crime and Corporate Transparency Bill. These changes have been long anticipated, and they will represent a positive and significant change to the way that Companies House will operate and how companies need to be administered. One of the benefits of increasing the Registrar’s powers is that Companies House will be able to remove material from the register, rather than having to seek a court order, which is time consuming and costly for companies. In addition, there will be more security in ensuring that accurate information is held on public record, stopping fraudulent documents from being filed – such as false accounting documents – or a director from being appointed who is on the UK sanctions list. With additional powers, the Registrar will be able to help protect companies and their employees from such fraudulent activities and other harms.
We have provided analysis of:
We will continue to analyse all parts of the Bill to ensure you are well informed and understand how it could impact you.