{"id":11558,"date":"2024-01-31T20:31:09","date_gmt":"2024-01-31T20:31:09","guid":{"rendered":"https:\/\/www.qualitycompanyformations.co.uk\/blog\/?p=11558"},"modified":"2024-09-15T15:12:03","modified_gmt":"2024-09-15T14:12:03","slug":"changes-to-uk-company-law","status":"publish","type":"post","link":"https:\/\/www.qualitycompanyformations.co.uk\/blog\/changes-to-uk-company-law\/","title":{"rendered":"Changes to UK company law – what you need to know"},"content":{"rendered":"
Several changes to UK company law have been introduced by the new Economic Crime and Corporation Transparency Act, which received royal assent on 26 October 2023. The first measures are due to come into effect on 4 March 2024. These include new rules for registered office addresses and changes to annual accounts filing and confirmation statements.\u00a0<\/span><\/p>\n This post provides a summary of 9 new measures you need to know about as a company owner or director, a PSC, or a member of a limited liability partnership or limited partnership. Anyone who files on behalf of a company or incorporated partnership should also familiarise themselves with these changes.\u00a0<\/span><\/p>\n The changes to UK company law give the registrar new and enhanced powers, enabling Companies House to improve the accuracy and quality of information held on the public register. These include:<\/p>\n Companies will face serious consequences if they fail to respond to a formal request from Companies House to provide more information. These could include financial penalties, annotations on the company\u2019s record, and even the prosecution of directors.<\/p>\n The new rules for registered office addresses require companies (including LLPs) to use an \u2018appropriate address\u2019 as their registered office at all times.\u00a0<\/span><\/p>\n An address is deemed an \u2018appropriate address\u2019 if:<\/p>\n In light of these changes, companies will no longer be able to use a PO Box as a registered office address<\/a>. If you currently use a PO Box, you should change your registered office to an appropriate address by 4 March 2024.\u00a0<\/span><\/p>\n Can I use my home address as my registered office?<\/span><\/a>\n \n There may be serious repercussions for any company that fails to adhere to these new rules. Where a registered office address is not appropriate, the registrar will change it to a default address held at Companies House. If this happens, the company has 28 days to provide an appropriate address and evidence of proprietary ownership, to avoid being struck off the public register.<\/p>\n Over the next 2 to 3 years, Companies House will be transitioning toward the filing of annual accounts by software only<\/a>. This change will apply to company directors who file accounts themselves, as well as companies who use accountants or other third-party agents to prepare and file their annual accounts.<\/p>\n To comply with the new requirement to deliver accounts in digital format, all companies must take steps to find suitable software before the web-based and paper filing options are removed.\u202f Software is already available, so most companies can make the necessary changes to their accounts filing now.<\/p>\n Preparing annual accounts for your limited company<\/span><\/a>\n \n Small companies and micro-entities will also be required to file their profit and loss accounts. Additionally, any small company that doesn’t qualify as a micro-entity will need to include a directors\u2019 report. The option to file \u2018abridged\u2019 accounts will be removed.<\/p>\n Companies claiming audit exemption will have to provide an additional directors’ statement on the balance sheet. The directors will be required to specify which exemption they are claiming and confirm that the company qualifies.<\/p>\n Further information on changes to small company accounts filing options<\/a> is available from Companies House.<\/p>\n From 4 March 2024, existing companies must provide a registered email address to Companies House when they file their next confirmation statement<\/a>. New companies will be required to provide this information when they incorporate.\u00a0<\/span><\/p>\n The registrar will use this registered email address to communicate with the company. It will not be disclosed on the public register.<\/p>\n Additionally, all companies will be required to confirm that their intended future activities will be lawful. This statement must be confirmed at the time of incorporation (for new companies) and every year on the confirmation statement.<\/p>\n Over the coming months, a new identity verification process will be introduced in a bid to deter the use of companies for illegal purposes. This requirement will apply to anyone who sets up, runs, owns, or controls a company in the UK, including:<\/p>\n For new companies, identity verification<\/a> must be completed at the time of incorporation. There will be a transition period for individuals in existing companies to verify their identity with Companies House.<\/p>\n An identity verification service using ID documents will be made available at Companies House. Authorised agents, such as company formation agents and accountants, will also incorporate the Companies House identity verification process in their existing checks.\u00a0<\/span><\/p>\n There is no need to do anything at the present time. Companies House will publish detailed guidance at a later date.\u00a0<\/span><\/p>\n In a phased approach over the next two years, Companies House will introduce greater protection of personal information on the public register<\/a>.<\/p>\n Individuals will be able to apply to the registrar to suppress the following personal information from historical documents that are currently available to the public:<\/p>\n Where an individual is at personal risk of physical harm or violence (e.g. domestic abuse survivors) as a result of their personal information being disclosed on the public register, they will be able to apply to Companies House to have their details protected from public view.\u00a0This includes:<\/p>\n These measures require secondary legislation before they can be implemented.\u00a0Further guidance on protecting your personal information<\/a> is available from Companies House.\u00a0<\/span><\/p>\n As a result of changes to UK company law, limited partnerships<\/a> (LPs) will be required to file their information through authorised agents and provide more information to Companies House.<\/p>\n Under these new measures, limited partnerships must:<\/p>\n The new rules<\/a> will apply to new and existing limited partnerships. Existing LPs will have a 6-month transitional period from the commencement of the new legislation to meet these new requirements. Any LP that fails to do so will be deregistered by Companies House at the end of the transitional period.<\/p>\n To make corporate ownership more transparent, UK companies will soon be required to:<\/p>\n Companies House will also:<\/p>\n Additionally, restrictions will be imposed on the use of corporate directors<\/a>. When the changes to UK company law come into effect, companies will only be permitted to appoint a UK corporate entity with a \u2018legal personality\u2019 as a corporate director.<\/p>\n Moreover, the directors of these corporate director firms must be natural persons (i.e. individuals, not corporate entities), and they will be required to verify their identity.<\/p>\n Currently, companies have a legal obligation to keep several statutory company registers at their registered office or SAIL address. However, under the new act, the government will remove the requirement for companies to maintain the following internal company registers:<\/p>\n Companies must continue to file details of their directors, secretaries, and PSCs at Companies House for disclosure on the public register. The requirement to keep other statutory company registers, including the register of members, will remain in place.<\/p>\n No date has been announced for when these changes will take place. Companies should continue to maintain their internal registers in the meantime.<\/p>\n The changes to UK company law introduced by the Economic Crime and Corporate Transparency Act<\/a> bring new responsibilities for:<\/p>\n The new legislation generally applies to all company types and other corporate entities registered with Companies House in England and Wales, Scotland, or Northern Ireland, including:<\/p>\n Whether you already have a company or are planning to set up a new company<\/a> shortly, it’s important to understand these new measures and the impact they will have on you and your business.<\/p>\n To fund the cost of its new powers and the measures introduced in the Economic Crime and Corporate Transparency Act, Companies House fees will increase in 2024. The changes to fee values will take new future expenditure into account whilst also ensuring costs are recovered from existing expenditure.<\/p>\n Detailed information on the changes to fees and when they will come into effect is not yet available. Companies House will publish updates online in due course. You can also sign up for the Companies House newsletter<\/a> to receive regular updates.<\/p>\n1. Greater powers for Companies House<\/h3>\n
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2. Registered office address requirements \u00a0\u00a0\u00a0<\/b><\/h3>\n
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3. Changes to annual accounts<\/h3>\n
4. Confirmation statement changes<\/h3>\n
5. New identity verification process<\/h3>\n
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6. Protecting personal information on the public register<\/h3>\n
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7. Changes to limited partnerships<\/h3>\n
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8. Improving transparency of company ownership<\/h3>\n
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9. Changes to internal company registers<\/h3>\n
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Who is affected by these changes to UK company law?<\/h3>\n
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Increases to Companies House fees<\/h3>\n
Thanks for reading<\/h3>\n