New powers for Companies House

In an effort to fight economic crime and make it easier to hold corporates to account, the Economic Crime and Corporate Transparency Act 2023 (ECCTA) was passed in October 2023. As well as the highly publicised reform of the identification doctrine and the introduction of a new offence of failing to prevent fraud, reform of Companies House was one of the areas targeted by ECCTA. 

The shortcomings of Companies House have long been known – highlighted by stories of companies being incorporated by long-deceased individuals or having fictional characters, including Donald Duck, listed as directors. The Chief Executive and Registrar of Companies described the introduction of ECCTA as a “pivotal moment for Companies House”.

The reforms in ECCTA are aimed at changing Companies House from a passive receptacle of information into to a proactive gatekeeper. To that end, Companies House will gain new powers to enable it to scrutinise information received and challenge it where necessary. The changes coming into force on 4 March 2024 are the following.

• Powers to query information: Companies House will gain powers to investigate and challenge the information it is provided with. Until now, Companies House has been a passive receptacle – receiving information with limited means to challenge it. The new powers will allow Companies House to investigate, challenge and even remove information provided to it. The powers can be used both on incorporation of a company and retrospectively in respect of companies already on the register and will enable Companies House to request supporting evidence from submitters.
• Registered office and email address: Going forward, companies must, at all times, have an "appropriate address" as their registered office. Companies will no longer be able to use PO Boxes as their registered office. Companies will also have to have an "appropriate email address".
• Lawful purpose: Companies incorporated from 4 March 2024 will be required to confirm that they are forming the company for a lawful purpose and all companies will be required to confirm their intended future activities are lawful as part of their annual confirmation statement.
• Restrictions on company names: ECCTA introduces new restrictions on using company names that contain computer code, that are intended to facilitate crime or suggest a connection with a foreign government.
• Information sharing: Companies House will have the ability to share data with other government departments and law enforcement agencies in a bid to help crack-down on economic crime. 

Penalties for non-compliance and for failing to respond to a formal request from Companies House for information will include:

• a financial penalty;
• an annotation on the company’s record; or
• prosecution.

In respect of a failure to have an "appropriate address", if a company’s registered office is not deemed appropriate, it will be changed to a default address and if an appropriate address with evidence of proprietary ownership is not provided within 28 days, the process to strike the company off the register can be commenced. 

Whilst ECCTA includes further reforms impacting Companies House, including identity verification procedures for responsible persons, these will come into force at a later date. 

A new year and a new challenge for Companies House   - Companies House

Improving the quality of data on our registers - Changes to UK company law Improving Companies House data