Francesco Fulcoli - Chief Compliance Officer and MLRO
The Economic Crime and Corporate Transparency Bill is now officially a part of UK company law. This momentous occasion marks a significant turning point in the history
of Companies House. This legislation provides the necessary tools to play a more significant role in combating economic crime and safeguarding
the integrity of the company register, while simultaneously fostering economic growth and facilitating business operations in the United Kingdom.
These legislative measures are designed to improve the quality and reliability of the data, allowing to respond quickly and effectively when individuals report unauthorized use of their personal information on the register. This represents a substantial
win for data security and is a matter particularly close that will significantly improve the KYB process in the UK.
The key provisions of this act include:
- Identity Verification: All new and existing registered company directors, individuals with significant control, and those filing on behalf of companies will now undergo identity verification.
- Empowered Gatekeeping: Company house officials will play a more proactive role in overseeing company formation and curating more trustworthy data.
- Enhanced Financial Information: The register will be upgraded to reflect the latest advancements in digital technology, ensuring accuracy, reliability, and informed business decision-making.
- Investigation and Enforcement: Companies House will now wield more effective investigation and enforcement powers while fostering stronger information-sharing partnerships with relevant stakeholders.
- Personal Information Protection: A stronger emphasis on safeguarding personal information to shield individuals from fraudulent activities and other potential harm.
The Registrar of Companies for England and Wales, along with counterparts in Scotland and Northern Ireland, will uphold four pivotal objectives:
- Ensuring Proper Delivery: Requiring timely and accurate document submission while adhering to the specified delivery requirements.
- Ensuring Register Accuracy: Verifying that the register contains comprehensive and precise information.
- Preventing Misleading Records: Ensuring that the data retained in the register does not mislead the public.
- Preventing Unlawful Activities: Stopping companies and others from engaging in unlawful activities or assisting others in such activities.
Company House will align their decisions with these objectives, underpinned by the newfound authority and capabilities.
While the act has received royal assent, the implementation of some provisions, such as identity verification, will be subject to system development and secondary legislation.
However, a range of measures will roll out sooner, including:
- Greater Information Scrutiny: Enhanced ability to question and reject inconsistent or incorrect data, and removal of such data in some cases.
- Robust Company Name Checks: Stricter checks on company names.
- Registered Office Addresses: Companies will be required to maintain a valid address at all times, disallowing the use of PO Boxes.
- Registered Email Addresses: Companies will need to supply a registered email address.
- Lawful Purpose Confirmation: An annual affirmation that the company's activities align with the law.
- Information Annotations: Alerts about potential issues with supplied information.
- Data Clean-up: Employing data matching techniques to identify and rectify inaccuracies.
- Data Sharing: Collaboration with other government departments and law enforcement agencies.
These measures will take effect in early 2024 and there will be an adjustment to fees as well, reflecting their commitment to maintaining cost recovery.
This transformational legislation marks a historic juncture in the evolution of Companies House! For the first time, they will take on a more proactive role in safeguarding the interests of businesses and individuals while contributing to a more transparent
and efficient business environment in the UK.