What's the law?

The Economic Crime and Corporate Transparency Act 2023 (“ECCTA”) has introduced changes by arming Companies House with enhanced scrutinising powers by amending certain points of the Companies Act 2006 (“CA 2006”).

What's changed?

From 4 March 2024 onwards, s28 of the ECCTA amends s86(2) of the CA 2006 to empower Companies House to police all of the companies in England and Wales by ensuring that they are all registered to an “appropriate” physical office with an address. This overcomes issues that arise when a Company uses a PO Box for its registered office. This has long since been complained about by litigators who wish to issue a Claim Form (a PO Box is not acceptable as an address on a Claim Form because a company cannot be deemed to carry on business at a PO Box number).

So in practical terms, any post received at the registered address (which now must be a physical address) is deemed to have come to the attention of an individual on behalf of the said company or the post is otherwise acknowledged on receipt of delivery. A PO Box is no longer good enough and there is also now a requirement for the company to supply a registered e-mail address.

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Companies House is now armed with greater powers to question information supplied to it and to require sight of supporting evidence. Those incorporating new companies are now required to confirm that the company is being formed for a lawful purpose. The ECCTA has also given Companies House greater powers to tackle and remove information which is not factually correct and to share information with other government departments and law enforcement agencies. The signs so far are that the Registrar intends to use these powers to the full.  

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Whilst the changes will help law enforcement agencies to target criminals, they will also assist innocent individuals whose personal details (names and addresses) have been used in connection with fraudulent companies and who have faced an uphill struggle in getting the record at Companies House set straight.

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If the new requirements under the ECCTA are not complied with, both the company and every officer of the company in default will be committing an offence, with a fine and / or the company being struck off the Register at Companies Houses being the consequence. A third-party agent’s address could be used but only if they meet the conditions for being an “appropriate” address as per the change in the relevant law.

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Whilst this change comes into place, if Companies House identifies an inappropriate registered office, it will change that address to a default address held at Companies House until notified otherwise. The said company must then submit to Companies House evidence of a new appropriate address within 28 days of the change to the default address. If no efforts are made on this, Companies House may commence the process to strike the said company off the register.

Why does it matter?

This legislation furthers the governmental legislative agenda of transforming Companies House into an officer with probing powers to provide the gatekeeping and enforcement function in respect of the data registered at Companies House. The ECCTA makes a number of changes, of which those described above are simply some. The ECCTA should ultimately help Companies House to play a pivotal role in preventing abuse of the register and create a platform to easily identify fraudulent activities. The boots are on and they’re walking!

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For more information on this please contact the Corporate team here at FMGS on 01524 61660 or submit your question to enquiries@fmgs.co.uk. We look forward to hearing from you.