Company law reform will impact on all charities incorporated as companies, as well as trading subsidiaries.
Earlier this month, the Economic Crime and Corporate Transparency Act 2023 (Commencement No.2 and Transitional Provision) Regulations 2024 brought in a range of company law reforms under the Economic Crime and Corporate Transparency Act 2023.
These changes will impact the role of Companies House, and the framework for administrating all companies, including charitable companies. The aim is to increase the reliability and factual accuracy of information held by Companies House and prevent fraud.
Companies House now has greater powers to query and challenge information submitted to it and take enforcement action, where necessary. It will also have a greater ability to share information with other government departments and law enforcement agencies.
The main changes are :
- Companies will need to confirm on their annual confirmation statements that "intended future activities of the company are lawful". This will also be included as a statement upon incorporation of a new company.
- Companies will also be required to provide an "appropriate email address" and ensure that the registered office is an 'appropriate address' - i.e. (in both cases) an address in which anything delivered is capable of receiving an acknowledgement of delivery and would be expected to come to the attention a someone acting on behalf of the company. PO Boxes will no longer be acceptable.
- Restrictions on a company's name have also increased, to include the power to reject a name which contains a computer code or where the Secretary of State is of the opinion the name could be used to facilitate certain crimes, or suggests a connection with a foreign government or international institution (a connection which does not exist).
On the horizon
There are other changes on the horizon, including:
- Companies House fees are increasing from May 2024;
- directors, members, or persons with significant control of a company being required to verify their identity. This will be completed either via Companies House, or an authorised corporate service provider (i.e. accountants, lawyers or company formation agents); and
- an end to the ability of companies to file hard copy accounts. This will be phased in over the next two to three years.
If you have any queries in relation to the changes outlined above, please do contact us.
