Economic Crime and Corporate Transparency Act 2023: implementation update

The Economic Crime and Corporate Transparency Act 2023 (ECCTA) received Royal Assent on 26 October 2023. It represents a key part of the Government’s legislative strategy to tackle financial and economic crime.

Because of the extensive nature of the reforms, the provisions will be coming into force in stages to give companies time to prepare. Our previous commentary on ECCTA can be seen here.

Key changes from 4 March 2024

On 29 February 2024, the Economic Crime and Corporate Transparency Act 2023 (Commencement No. 2 and Transitional Provision) Regulations 2024 were published, bringing into force the first set of substantive changes from 4 March 2024.

This raft of changes is largely as anticipated, although with a slightly wider scope than expected. The most significant include the following.

1. Registered office address

Every company is required to have an “appropriate” registered office address. An appropriate address is one at which any documents sent to the address will reach the person acting for the company and will be recorded by acknowledgement of delivery.

A third-party agent’s address remains appropriate if it otherwise meets the criteria, and we continue to provide this service for clients.

However, a PO Box is no longer permissible. Companies House is being given additional powers to change inappropriate registered office addresses to a default address.

2. Registered email address

All companies will be required to provide a registered email address to Companies House which will be used to communicate with the company. New companies will have to provide a registered email address when they incorporate, and existing companies must provide one when filing their next confirmation statement.

The registered email address will not be published on the public register, and the same email can be used for different companies. An agent’s email address is permissible, provided emails sent to the address will be brought to the attention of a person acting on behalf of the company.

The company will have a duty to maintain an appropriate registered email address in the same way as their registered office address. The failure to do so will be an offence.

3. Statement of lawful purpose

A new statement of lawful purpose is being introduced. On incorporation, the initial subscribers of any company being incorporated will be required to confirm that it is being formed for a lawful purpose, and its intended future activities will be lawful.

Existing companies will also have to make a lawful purpose statement when filing future confirmation statements. This is expected to be a simple “check box” requirement. 

4. Additional powers for Companies House

Companies House is being given greater powers to challenge and / or reject information provided if it believes that such information is inaccurate, incomplete or fraudulent. Companies House will also be empowered to conduct stronger checks on company names to ensure that company names are not misleading.

Where Companies House does not receive satisfactory information, it will be able to flag inconsistencies and issues requiring further investigation by annotating the register. This will provide public notice of possible compliance concerns.  

In connection with the augmented role of Companies House as a more active gatekeeper, certain fees are increasing from 1 May 2024. 

The Government has updated and republished its series of ECCTA factsheets here.

Further anticipated reforms

We will publish further updates as the remaining provisions of ECCTA come into force.  Significant expected reforms that are not yet live include the identity verification regime for directors and PSCs, changes to membership information requirements, and wide-ranging changes to partnership law.

This publication is a general summary of the law. It should not replace legal advice tailored to your specific circumstances.

© Farrer & Co LLP, March 2024