Big Changes for UK Companies

From 4 March 2024, companies formed in the UK have to follow new rules from a law called the Economic Crime and Corporate Transparency Act 2023.

The Economic Crime and Corporate Transparency Act 2023 (ECCTA2023) has introduced significant changes for companies, effective from 4 March 2024. These changes include increased filing fees and new financial penalties, signalling a stricter approach to compliance.

Under the new law:

1.   Lawful Purpose Statement: When incorporating a new company on or after 4 March 2024, subscribers must confirm that the company is being formed for a lawful purpose. Furthermore, all companies will have an ongoing obligation to affirm in their annual confirmation statement that their future activities will comply with legal requirements.

2.   Registered Email Address: All companies are now required to provide an ‘appropriate’ email address to Companies House. An email address is considered appropriate if it is likely to be monitored by someone acting on behalf of the company. This email address will not be publicly available and will be used solely for communication with Companies House.

·   For new companies formed after 4 March, providing an appropriate email address during incorporation is mandatory.

·   Existing companies must include an appropriate email address in their first confirmation statement filed after 4 March.

Third parties involved in incorporating or filing statements for companies should seek confirmation of the company’s lawful activities and details of an appropriate email address starting from 4 March.

3.   Registered Office Address:

·        All companies are now required to maintain an ‘appropriate registered office address’. This physical address should be where documents delivered to the company would naturally come to the attention of someone acting on its behalf. Additionally, it should allow for an acknowledgment of delivery.

·   Third parties can still offer a registered office service for companies, provided they have procedures in place to monitor and forward any received mail.

·   New companies formed after 4 March must provide an appropriate registered office address during incorporation. Existing companies without an appropriate registered office address (e.g., a PO Box) will be asked to update their address when filing a confirmation statement.

4.   Increased Fees and New Financial Penalties:

·   Companies House fees will increase from 1 May 2024. The expanded scope of activities funded through these fees now includes investigation and enforcement costs under ECCTA 2023.

·   Some fees have significantly increased. For instance:

- Digitalincorporation will now cost £50 (previously £12).

 - Digital same-day change of name will be £83 (previously £30).

 - Digital reduction of share capital via the upload service will be £136 (previously £50).

·   Paper filings remain more expensive than their digital counterparts.

New regulations grant the Registrar of Companies the authority to impose financial penalties (up to £10,000) directly as an alternative to criminal prosecution for offenses committed under the Companies Act 2006. These regulations are expected to come into force on 2 May2024.