Further to the coming into force of the Economic Crime and Corporate Transparency Act 2024 in October 2023, Companies House has announced the first set of changes which came into force from 4th March 2024. These changes are welcome as Companies House will now more robustly enforce compliance, bringing it more in line with foreign registries.
Registered office address will now have to be the “appropriate address” at all times. Whilst a third-party agent providing address services (such as an accountant or a provider of corporate secretarial services) is still permitted, the following conditions must be satisfied:
In practice, what this means is that any company using a PO box as its registered office will no longer be able to do so.
Any company not having an “appropriate address” as its registered office from 4th March 2024 may be struck off from the register. Helpfully, Companies House have advised that were they have identified a PO Box as the registered office, they will, in the first instance change the address to a default Companies House address whereby the company will have 28 days to provide Companies with an appropriate address to be entered on the register together with evidence of the company’s link to that address. Where a company fails to do so, it is liable to be struck off the register.
If the requirement of the Company to provide evidence of a link with its appropriate address is surprising, this is because Companies House will take a pro-active approach to checking the information supplied by Companies.
It remains to be seen how this will work in practice long-term however directors can expect Companies House to query information provided by Companies henceforth. This is a welcome development which aims to bring the UK registry closer to many foreign registries whose records can be relied on as being accurate. To a lesser degree this may well result in less instances of rogue directors filing unapproved documents with the registry.
Henceforth, on incorporation, the subscribers (or shareholders) will be required to make a statement that they are forming a Company for a lawful purpose. The intention of this statement is to make it abundantly clear that all companies have a duty to operate in a legal way. In addition, this should have the effect of extending liability to shareholders whether they are directors or not.
In addition, each new and existing company will need to confirm that it continues to function for a lawful purpose on an annual basis when filing its confirmation statement.
Whilst this does not introduce new obligations as to lawful activities themselves, i.e. business should always be conducted for a lawful purpose, this does provide a further tool to the Registrar or enforcement agencies in which to pursue directors or founding shareholders where such statement ultimately is proven to be untrue. Its benefit is therefore in enforcement.
Bringing legislation into the digital age, something long overdue, companies will now be required to provide a registered email address as well as an appropriate physical address for its registered office. It is anticipated that Companies House will communicate with companies using the registered email address.
The email address will be available on the public register making it easier for third parties to evidence that communications were sent to the correct address.
Any newly incorporated company will be required to do this on incorporation however there is a transitional period for existing companies to notify Companies House of the registered email address, with this failing due next time the company files its confirmation statement.
The Registrar of Companies will, from May 2024, have the power to impose penalties not exceeding £10,000 instead of conducting criminal prosecutions for breaches of Companies Act 2006. Whilst we are yet to see how this will work in practice, it would be reasonable to expect a more proactive approach from the Registrar in issuing such fines where prosecution is not required.
This article is for general information only and does not constitute legal or professional advice. Please note that the law may have changed since this article was published.
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