Corporate Transparency: how new regulations in 2023 might impact you

Since 2019, the government has been considering and consulting on proposals to enhance the role of Companies House and increase the transparency of UK corporate entities in order to tackle economic crime. It is anticipated that new legislation and Companies House reforms may come into effect in 2023, which will change the information that companies are required to file with Companies House, including in relation to the following:

New powers for Companies House Registrar

It is anticipated that the powers of the companies house Registrar will be enhanced, including as follows:

• New querying power: effecting both new and existing information on the Companies House register, allowing the Registrar to query information on a discretionary basis, which appears to the Registrar to be suspicious or potentially fraudulent with potential sanctions for non compliance.
• New power to remove material that impacts the integrity of the Register.
• New power to change unauthorised registered office addresses, for example where there is evidence that the address does not exist.
• New power to query a company’s name and change that name to its number.

The government also intends to permit the sharing and cross referencing of information between Companies House and other public bodies that work to prevent economic crime, whilst enhancing protections around certain sensitive information, such as certain personal information and sensitive addresses.

Enhanced identity requirements for company officers

It is anticipated that:

• enhanced requirements for the identification of a company’s officers will be implemented, including through a digital identification service that links a person with an authorised identification document.
• all entities registered at Companies House will have at least one fully verified natural person directly associated with them on the public register.
• all of the following will be required to verify their identity, failing which they will be subject to sanctions:
  • All new and existing company directors.
  • Persons with Significant Control (PSC) of relevant entities.
  • All persons presenting information to Companies House.
  • Members of LLPs.
  • General partners of limited partnerships.
  • Directors of overseas companies.
  • All directors of Relevant Legal Entities (RLEs).

The government also plans to enhance powers in relation to voiding the appointments of certain individuals as directors and bring in requirements in relation to corporate entities acting as directors.

Additional shareholder information required

It is anticipated that the government with introduce requirements for companies to record the full names of shareholders and PSCs in their registers and also provide a one off shareholder list to Companies House, which will be updated annually.

Changes to the filing of financial information

It is anticipated that the government will also introduce:

• Enhanced validation checks on any financial information delivered to Companies House.
• Require financial information to be submitted digitally (with an appropriate transition period).
• Simplify the filing options available to small and micro-entities to just two options: micro-entities accounts and small companies accounts so that information such as turnover and profit or loss is available on the register in relation to all companies.
• Require additional eligibility statements in relation to dormant companies to allow the Registrar to take enforcement action against any false evidence.

If you have any queries in relation to any of the potential changes that may occur in this area in 2023 please contact us. Once any changes are brought into force, we will be available to assist on any changes to your current practices.