Major reforms to UK company law are being introduced in 2024 and beyond that will affect all companies and directors. The new Economic Crime and Corporate Transparency Act brings increased powers and responsibilities to Companies House alongside stricter requirements for companies, directors, and people with significant control. 

This wide-reaching legislation aims to clamp down on economic crime by enhancing corporate transparency. The reforms will improve the reliability of information held at Companies House and increase its role in preventing financial crimes. Companies and directors need to understand and prepare for the changes.

Enhanced Powers for Companies House

A primary objective is to give Companies House extended capabilities to act as an active gatekeeper over UK companies. New measures grant Companies House heightened powers to scrutinize, investigate, and enforce company law. 

Companies House will have increased rights to share data with law enforcement agencies to tackle offences. There will also be stronger verification checks and requirements around information filed relating to companies and directors.

New Identity Verification Rules

A vital change is the introduction of mandatory identity checks for people setting up, managing or controlling companies. Directors and anyone filing information, including accountants, will need to comply with identity verification. The purpose is to improve the accuracy of details held for directors. Existing directors may also face verification requests in some circumstances.

Reforming the Annual Confirmation Statement 

All companies must file a yearly confirmation statement to verify that their details at Companies House are current. Under the new act, extra information will need to be provided starting March 2024. Statements must affirm that the company’s intended activities remain lawful. This change intends to pick up on fraudulent and criminal behaviour.

Restrictions Around Registered Addresses

Companies will no longer be able to utilize a PO box as their registered office address. All organizations must provide Companies House with an appropriate physical location. Additionally, companies must supply a registered email address for official communications to assist with verification processes. These measures aim to clamp down on shell companies with fake or misleading addresses.

Increased Company Ownership Transparency

To make company ownership more transparent, increased shareholder information must be filed, and limitations are introduced on appointing corporate directors. This change intends to ensure accountability around who owns and controls UK companies.

Mandatory Digital Filing of Company Accounts 

Companies House aims to digitize all company records by mandating that accounts get filed using software. Organizations filing manually or by paper have a limited transition period to adopt accounting software. Alongside digitization, the filing process for small and micro entities is being overhauled. These companies must submit more comprehensive profit and loss accounts going forward.

Preparing for the Changes as a Director

Directors and organizations need to prepare themselves for adjustments like identity checks, registered email addresses and increased reporting requirements. Firms not utilizing digital accounting software should address this urgently before paper filing ends. While the roll-out timescale lacks firm details currently, companies that are prepared stand to benefit most from the transparency drive. Working closely with your accountant can help guarantee full compliance with the new company law regime.

Though expanding Companies House powers may seem intrusive, these significant upgrades ultimately foster trust and reliability in the UK’s corporate landscape. The reforms should cultivate a more robust environment for businesses to operate within.