Important Changes to UK Company Law Starting from 4th March 2024

There are some important changes to UK company law taking effect from 4th March 2024 that will affect Company Directors, People with Significant Control and Anyone Filing on Behalf of a Company. Here is a summary of the main changes. If you have any questions, please contact us.

Changes to UK Company Law from 4th March 2024

There are some big changes to UK company law taking effect from 4th March 2024.

These are all measures that fall under the “Economic Crime and Corporate Transparency Act” which became law in October 2023. The Government claim that: “The measures will lead to improved transparency and more accurate and trusted information on our registers.”

PLEASE NOTE: Not all of these changes will take effect from 4th March 2024 but will be phased in over the coming months and years.

Where the 4th March 2024 is the start date for the new measure, we have made it clear.

Leonherman Limited Company clients who use our Company Secretarial Service (i.e. we manage your registered office), or clients for whom we submit your company’s confirmation statement, can rest assured we will help you to meet your obligations under these new measures.

However, if you have any questions about any of the changes outlined in this article, please contact your account manager at Leonherman and we will be happy to assist you.

UK COMPANY LAW CHANGES AT A GLANCE:

  • From 4th March 2024 – New Rules for Registered Office Addresses – No PO-Box Addresses: All companies must have an ‘appropriate address’ as their registered office at all times.
  • From 4th March 2024 – Supply a Registered Email Address: From 4th March 2024, all companies will be required to give a registered email address to Companies House.
  • From 4th March 2024 – Statement of Lawful Purpose: All companies must confirm they’re forming/running the company for a lawful purpose and confirm its intended future activities will be lawful
  • Registrar’s Powers Increased: The registrar will have greater powers to query information and request supporting evidence, will be able to annotate the register when information appears confusing or misleading and there will be stronger checks on company names.
  • Verifying Identity: Anyone running, owning, controlling, or setting up a company in the UK will need to verify their identity to prove they are who they claim to be.
  • Changes to Small Company Filing Options: Small and micro-entity companies will need to file their profit and loss accounts. The option to file abridged accounts will also be removed. And small companies that do not qualify as micro entities will also need to file a directors’ report.
  • Claiming an Audit Exemption: Any company claiming an audit exemption will need to give an additional statement from their Directors on the balance sheet, specifying which exemption is being claimed, and confirming that the company meets the qualifying criteria for that exemption.
  • Protecting Your Personal Information: Over the next 2 years, individuals will be able to apply to suppress personal information (residential address, date of birth etc.) from historical documents that are easily found through an internet search on Companies House.
  • Transparency of Company Ownership: There will be new requirements to provide additional shareholder information, and restrictions on the use of corporate directors.  
  • Investigation, enforcement, and data sharing: Companies House will get more effective investigation and enforcement powers, and new powers to share data with law enforcement agencies and other government departments.
  • Filing Accounts by Software Only: Over the next 2-3 years, a transition will take place so that you will only be able to submit accounts using software.
  • Specific Changes to Limited Partnerships Information: Limited Partnerships will be required to submit more details to Companies House.

More details about each of these new measures can be found below:

From 4th March 2024: New Rules for Registered Office Addresses

From 4th March 2024, all companies must have an ‘appropriate address’ as their registered office at all times.

Please Note: All existing clients of Leonherman who use our Company Secretarial Service can rest assured that their registered office address meets the criteria of an appropriate address.

If you don’t believe you have an “appropriate address” as your company’s current registered office, please contact us without delay and if needed, you can move your registered address to Leonherman using our Company Secretarial Service.

An appropriate address is one where:

Any documents sent to the registered office should be expected to come to the attention of a person acting on behalf of the company.
> Any documents sent to that address can be recorded by an acknowledgement of delivery.

Importantly, this means that you will not be able to use a PO Box as your registered office address from 4th March 2024.

If you are using a PO Box address as your registered office address, you must change it by 4th March 2024.

Many Company Directors have used PO Boxes in the past in order to keep their personal address details hidden.

You can use a third-party agent – like Leonherman – as your registered office address if they meet the conditions for an appropriate address.

From 4th March, if you don’t use an appropriate registered office address then Companies House will change your address to a default address held at Companies House.

You will then have 28 days to provide Companies House with an appropriate address, with evidence of a link to that address.

If your company does not have an appropriate registered office address after 28 days, you could be struck off the register.

From 4th March 2024: Registered Email Address

From 4th March 2024, all companies will be required to give a registered email address to Companies House. This email address will not be published on the public register.

You will need to give Companies House this email address on your next confirmation statement from 5th March 2024.

From 4th March 2024, all new companies will need to give a registered email address when they incorporate.

Companies House will use this email address to communicate with you about your company, so you should make sure you submit an appropriate email address that is regularly checked.

You can register the same email address for more than one company and you can update this email address throughout the year.

If you do not maintain an appropriate registered email address for your company, you will be committing an offence.

Please Note: Clients of Leonherman for whom we submit a confirmation statement will be asked for a registered email address and we will submit this on your behalf when we submit your statement.

If we don’t currently submit your company’s confirmation statement, please speak to us about this service if this is something you’d like us to manage for you.

From 4th March 2024: Statement of Lawful Purpose

From 4th March 2024, when you incorporate a company, the subscribers (shareholders) will need to confirm they’re forming the company for a lawful purpose and that the company’s intended future activities are lawful.

For existing companies, you will need to make a lawful purpose statement when you file your next confirmation statement from 5th March 2024. You will be prompted to do this when you submit online.

Why are Companies House make this change? They say: “The intention of these new statements is to make it clear that all companies on the register, new and existing, have a duty to operate in a lawful way. We may take action against your company if we receive information that confirms you’re not operating lawfully.”

Please Note: Clients of Leonherman for whom we submit a confirmation statement will be asked to confirm their statement of lawful purpose and we will submit this on your behalf when we submit your confirmation statement.

If we don’t currently submit your company’s confirmation statement, please speak to us about this service if this is something you’d like us to manage for you.

Registrar’s Powers Increased – Stronger Checks on Company Names

From 4th March 2024, the registrar will have greater powers to query and challenge information that appears to be incorrect or inconsistent with information held by Companies House.

In some cases, the registrar will be able to remove information more quickly, if that information is inaccurate, incomplete, false, or fraudulent.

In particular, there will be stronger checks on company names which may give a false or misleading impression to the public.

If the registrar believes there are potential issues with the information supplied to Companies House, they will use annotations on the register to let users know about potential issues.

Identity Verification

In the coming months – not from 4th March but soon – anyone running, owning, controlling, or setting up a company in the UK will need to verify their identity to prove they are who they claim to be.

For all new companies, anyone with significant control (PSCs) will need to complete identity verification.

This will also apply to other registration types, such as LLPs.

For existing companies, all PSCs will have a transition period to verify their identity with Companies House.

This will be done directly with Companies House or through an authorised agent like Leonherman.

Please Note: Clients of Leonherman will already have been through an anti-money laundering process as part of our due diligence and the Companies House identity verification process changes will build on these existing checks.  

Changes to small company filing options

Previous government consultations have suggested that the minimal disclosures that small companies are allowed to make does not give a level of transparency that is sufficient to get limited liability protection.

Currently, a small or micro company that prepares abridged or full accounts does not have to file a copy of its profit and loss account and/or the director’s report with Companies House.

The government believes that this minimal level of disclosure has the potential to appeal to fraudsters wishing to present a false image of the company and it has also made it difficult for lenders and creditors to determine the creditworthiness of small businesses.

That’s why the government are now streamlining the accounts filing options for small and micro-entity companies.

Under the new framework, small and micro-entity companies will need to file their profit and loss accounts. The option to file abridged accounts will also be removed. And small companies that do not qualify as micro entities will also need to file a directors’ report.

The details of what small companies will need to include in their submissions will be set out in secondary legislation.

Claiming an Audit Exemption

In further changes, any company claiming an audit exemption will need to give an additional statement from their Directors on the balance sheet, specifying which exemption is being claimed, and confirming that the company meets the qualifying criteria for that exemption.

Protecting Your Personal Information

We know from speaking to our clients that they are often uncomfortable about the level of personal information shared by Companies House, which is widely available through a simple internet search.

For some individuals, there is even a personal risk of physical harm or violence as a result of their personal information being on a Companies House public register.

The government acknowledges that there is a need to balance the need for corporate transparency with the understanding that personal information should only be published when it’s necessary and proportionate to do so.

Over the next 2 years, individuals will be able to apply to suppress the following information from historical documents:

  • Residential addresses in most instances when shown elsewhere on the register (for example, when used as a registered office address)
  • Day of birth for documents registered before 10 October 2015 (only the month and year of birth have been publicly displayed since 10 October 2015)
  • Signatures
  • Business occupation

Individuals at personal risk of physical harm or violence as a result of their personal information being on a Companies House public register (for example, domestic abuse survivors) will be able to apply to have their information protected from public view.

The information that can be protected from public view includes:

  • Name (or previous names)
  • Sensitive addresses where public disclosure puts its residents at risk (for example, a women’s domestic abuse refuge) 
  • In the most serious cases, all other details, for example, service address and partial date of birth

Transparency of Company Ownership

Company ownership will be more transparent under the new measures introduced by the government.

When the measures come into force, companies must:

  • Record the full names of shareholders who are individuals – or the full names of corporate members and firms – in their registers
  • Provide a one-off full shareholder list so Companies House can display shareholder information in a more user-friendly way

Companies House will:

  • Collect and display more information from companies claiming an exemption from providing person with significant control (PSC) details, including the reason for the exemption
  • Collect and display the conditions which allow a relevant legal entity (RLE) to be recorded as a PSC

The government will also put restrictions on the use of corporate directors. Only UK corporate entities with ‘legal personality’ can be appointed as corporate directors. The directors of these corporate directors must be natural persons and must verify their identity as previously outlined above.

Filing Accounts by Software Only

Over the next 2-3 years, a transition will take place so that you will only be able to submit accounts using software. This will allow more efficient and secure filings for companies, and will improve the quality of the data on the register.

To comply with these changes, all companies will need to find suitable software before web-based and paper filing options are no longer available.

This change will apply to Directors who file accounts themselves, and companies who use third party agents or accountants to file their annual accounts.

Specific Changes to LPs (Limited Partnerships) Information

When the measures come into force, LPs must:

  • Provide partners’ names, date of birth and usual residential address
  • Verify the identity of general partners
  • Provide a registered office within the UK
  • Provide a standard industrial classification (SIC) code
  • File an annual confirmation statement

LPs will need to file their information through an authorised agent (also known as an Authorised Corporate Service Provider) that’s registered with Companies House.

Contact Leonherman

If you have any questions about these changes to UK Company Law and how they might affect your company, please contact our accounting team and we’d be happy to discuss them with you. Please email: partners@leonherman.co.uk or call us on 0161 249 5040.

Important Disclaimer

This material is published for client information. It provides only an overview of the regulations in force at the date of publication, and no action should be taken without consulting the detailed legislation or seeking professional advice. No responsibility for loss occasioned by any person acting or refraining from action as a result of the material can be accepted by Leonherman.

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