Berwick: 01289 302463

JH Greenwood & Company logo

Companies House gets major new powers

Companies House gets major new powers

The Economic Crime and Corporate Transparency Bill, currently going through parliament, impacts company directors, secretaries, and people with significant control.

The move gives Companies House greater powers to check information on the companies register, and enhanced ability to work with law enforcement and other bodies tackling fraud. It’s described as the ‘biggest upgrade’ at Companies House in 170 years, but the new legislation doesn’t just apply to UK companies. Other legal entities, such as limited partnerships – including Scottish limited partnerships, and limited liability partnerships, are also within scope.

Of particular importance are rules requiring new and existing directors to verify their identity. People with significant control and anyone else filing with the Registrar will also need to verify. Restrictions are imposed on the use of corporate directors.

New accounts-related requirements come in, too. The option to file abridged accounts will be removed, so that all small companies will have to file a profit and loss account and directors’ report. Micro-entities will also be required to file a profit and loss account. Companies, including dormant companies, relying on audit exemptions will need to make an eligibility statement, and in due course, digital filing and full tagging of financial information in iXBRL format will be mandated.

The Bill sets out to modernise the law governing limited partnerships, including Scottish limited partnerships. This will bring stricter registration requirements; the need for limited partnerships to maintain a connection to the UK; and increased transparency. The Registrar will be able to deregister limited partnerships in certain circumstances, for example where they are no longer carrying on a business.

It’s all part of a much bigger picture: the ongoing drive against criminal abuse of corporate structures for fraud, terrorism and money laundering purposes. It’s also part of the government’s bid to stop the use of the UK as a safe haven for ‘dirty money’ following the invasion of Ukraine. The logic is that more enforcement powers, more compliance checks, more requirements to make financial information available to the public, make a more transparent business environment. And a more transparent business environment makes it harder for criminals to hide.

As yet, there is no start date for these provisions. They are likely to be introduced in stages, but it would make sense to consider now how to deal with the change coming. We should be happy to discuss this with you further.

Scroll to Top