Companies House public register: The UK demands more information from its corporate entities
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Companies House public register: The UK demands more information from its corporate entities

The UK Economic Crime and Corporate Transparency Bill should receive Royal Assent (that is, become law in the UK) this spring. The new law gives Companies House more investigation and enforcement powers over companies which report incorrect information to the register.

The UK was one of the first countries to require corporate entities to make public their beneficial owners in 2016. Many countries followed this lead. On 22 November 2022 the Court of Justice of the European Union (CJEU) passed a judgment in favour of applicants wanting to keep their names private which has caused some EU countries (e.g., the Netherlands and Luxembourg) to suspend, for now, public access to their registers of beneficial owners. Nevertheless, the UK is pressing ahead and seeking to give more powers to its registry (known as “Companies House”) so that it is a more active gatekeeper of accurate company information.

What will change with the new law

The changes are good news. The UK’s register has long been criticised for the ability of criminals to present it with incorrect information. The new law will, amongst other measures, allow Companies House to:

  • verify the identity of new and existing directors, owners, and those who deliver documents to it
  • share data with law enforcement bodies
  • demand any information it wants for verification
  • analyse information for the purposes of crime prevention or detection
  • impose fines (without any criminal prosecution) for breaches of the laws on the disclosure of information.
The new law will give Companies House more powers to pursue inaccurate company information.
Mark Lucas, Partner, Moore Barlow LLP – Member of ECOVIS International, Woking, UK

The Bill also amends the financial disclosures required of small companies by:

  • requiring micro-entities (i.e., those with two of a turnover of GBP 632,000 or less, GBP 316,000 or less on their balance sheet, or 10 employees or fewer to file a profit and loss account (not just a balance sheet) and
  • requiring small companies (i.e., those with two of a turnover of GBP 10.2 million or less, GBP 5.1 million or less on their balance sheet, or 50 employees or fewer) to file a directors’ report (and unabridged accounts).

Criminal activity will be more difficult

These changes are to be welcomed if they render the UK less open to criminal activity and misleading public information. They signal a change from a laissez-faire approach to an interventionist approach, which will come at a cost. Indeed, the law will be amended to expand the grounds upon which the Secretary of State may determine the fees to be paid to Companies House to include “investigation and enforcement activities that contribute to the maintenance of a healthy business environment”. Ultimately, more accurate, more reliable information will come at a cost to all but we at Moore Barlow are certain that this is as price worth paying.

For further information please contact:

Mark Lucas, Partner, Moore Barlow LLP – Member of ECOVIS International, Woking, UK
Email: mark.lucas@moorebarlow.com

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Contact us:

Mark Lucas
Moore Barlow LLP – Member of ECOVIS International
165 Church Street East
GU21 6HJ Woking
Phone: +44 1483 748500
www.moorebarlow.com