What are the latest Companies House Reforms?

On 26 October 2023, the Economic Crime and Corporate Transparency Act received Royal Assent, meaning that the proposed reforms to the operations of Companies House were confirmed. The measures are intended to improve the visibility and accuracy of company information and will play a much greater role in disrupting economic crime by preventing fraudulent and unlawful activity, whilst supporting economic growth.

Companies House aims to introduce the initial wave of changes on 4 March 2024. However, the implementation of these changes requires secondary legislation, so the exact date hinges on parliamentary schedules. The introductory date will not be earlier than 4 March 2024 and we’ve outlined what these changes will encompass so you can make sure you’re fully prepared for the transition.

• Enhanced authority to query information and request supporting evidence.
• Strengthened scrutiny of company names.
• Implementation of new regulations for registered office addresses.
• Mandatory provision of a registered email address for all companies.
• Requirement for companies to affirm their formation for lawful purposes during incorporation, as well as confirm the legality of their intended future activities in their confirmation statement.
• Capability to annotate the register in cases of confusing or misleading information.
• Initiatives to clean up the register, utilising data-matching techniques to rectify inaccurate information.
• Facilitation of data sharing with other government departments and law enforcement agencies.

What do these early changes mean?

We understand that companies are eager to ensure they are adequately prepared for the adjustments so they can take action at the right time, so we’ve summarised three key changes below:

1. New rules for registered office address.

Commencing from 4 March 2024, new regulations regarding registered office addresses will come into effect. These regulations mandate that companies maintain an ‘appropriate address’ as their registered office at all times and is defined as one where:

• Any documents sent to the registered office are expected to reach a person acting on behalf of the company.
• Documents sent to this address can be recorded through an acknowledgement of delivery.

As a result of these changes, the use of a PO Box as a registered office address will no longer be permissible after 4 March 2024. However, companies can still utilise the address of a third-party agent if it meets the criteria for an appropriate address.

Failure to maintain an appropriate address may result in the company being struck off the register if they fail to provide evidence of an appropriate address within 28 days.

2. Registered email address

Companies will be required to provide a registered email address to Companies House. This email address will not be publicly disclosed on the register and serves as the primary mode of communication between Companies House and the respective company. Hence it is crucial to select an appropriate email address. There is flexibility to register the same email address for multiple companies.

This also means that newly incorporated companies must provide a registered email address during their incorporation process. Existing companies will be required to provide a registered email address when submitting their next confirmation statement, with a statement date from 5 March 2024 onwards.

Similar to the requirement for maintaining an appropriate registered office address, companies are obligated to uphold an appropriate registered email address. Failure to comply with this requirement will constitute an offence.

3. Statement of lawful purpose

When incorporating a company, shareholders will be required to confirm that they are establishing the company for a lawful purpose. Additionally, on the confirmation statement, it must be verified that the company’s intended future activities are also lawful.

These new statements aim to emphasise that all companies listed on the register, whether new or existing, have a responsibility to operate within the bounds of the law. If Companies House receives information indicating unlawful operations, they must take action against the company.

Documents will not be accepted if these statements have not been confirmed.

Existing companies must also include a statement confirming lawful purpose when filing their next confirmation statement, with a statement date from 5 March 2024 onwards.

Most recent update: changes to Companies House fees

Beginning on 1 May 2024, new incorporation and registration fee adjustments will impact the process of establishing a Community Interest Company (CIC) in response to Companies House’s recent announcement regarding alterations to their fees.

Effective from 1 May 2024, the following fees will be applicable for those seeking to register as a CIC:

• Online incorporation: £65 (previously £27)
• Paper-based incorporation: £86 (previously £35)
• Conversion from a limited company to a CIC: £45 (previously £25)

If you would like to find out more about the fee changes, click here.

How we can help you

If you would like to discuss the implications of the new reforms, contact us today and a member of the team will be in touch.

Email: [email protected]

Phone: 01926 422292