Companies House – Implications of the Economic Crime and Corporate Transparency Act

14 November 2023

• Business Services

On 26 October 2023 the Economic Crime and Corporate Transparency Bill received Royal Assent, becoming the Economic Crime and Corporate Transparency Act 2023 (ECCTA).

The Bill brings stronger powers to tackle money laundering and other illicit activity, while introducing long-awaited reforms to Companies House, to simplify filing obligations. New measures include:

• reforms to prevent the abuse of limited partnerships;
• additional powers to seize and recover suspected criminal crypto assets;
• reforms to give businesses more confidence to share information to tackle economic crime;
• the introduction of a Failure to Prevent Fraud offence;
• introducing identity verification for registered company directors, people with significant control and those who file on behalf of companies;
• improving the financial information on the register so that it is more accurate;
• providing Companies House with more effective investigation and enforcement powers, and introducing better cross-checking of data with other bodies;
• enhancing the protection of personal information provided to Companies House; and
• changing the filing requirements for smaller companies.

Companies House

The legislation aims to broaden the Registrar of Companies House’s powers so that the registrar can become a more active gatekeeper over company creation.

Companies House will have more effective investigation and enforcement powers, with better cross-checking of data with other public and private sector bodies. The protection of personal information provided to Companies House will be enhanced to protect individuals from fraud and other harms.

Simplifying filing obligations

Smaller companies will no longer have the option to file abridged accounts. They will be required to file both their profit-and-loss account and directors’ report, also removing the option of filing so-called ‘filleted’ accounts. Micro entities will similarly be required to file their profit and loss account but will still have the option not to prepare or file a directors’ report.

The Bill includes provisions allowing the Registrar to make profit-and-loss accounts of small or micro-entities (or parts of them) unavailable for public inspection. This will provide comfort to those concerned about trading information becoming publicly available on the grounds of commercial sensitivity, while ensuring Companies House receives the information to verify that companies are filing accounts correctly.

There will be a need to pass secondary legislation to implement the changes and, as Companies House will need to update its systems, it is likely to be some time before the changes come into force. We will provide updates when a clearer timeline is available. 

Get in touch

For further information on how the changes may affect your business, please contact a member of our team: