The Economic Crime and Corporate Transparency Act (ECCTA)
23 January 2024
The Economic Crime and Corporate Transparency Act (ECCTA), which got the green light on 26 October 2023, brings in a number of changes that will shake things up for every company registered at Companies House. It’s not just a headache for company secretaries; even the folks handling accounts will feel the heat. This update breaks down these changes and tells you how they'll affect you, and offers our support.
Here are the key changes:
- Say goodbye to submitting shortened accounts for small and micro businesses.
- Everyone, from directors to the major shareholders with significant control, needs to prove who they are.
- New declarations have to be made when incorporating and yearly after that.
- Companies have to manage their own members' register.
- Corporate directors, whether local or overseas, will face new rules.
- Companies House is shifting towards electronic communication.
The rollout of these changes won’t happen overnight. Some might take until 2025 to kick in, but a few will hit the ground running, like the need for every company to have a registered email address and other fresh requirements about lawful purposes, registered office addresses, and audit exemptions.
Statutory Accounts Filing: No more shortcuts—small and micro entities must file a profit and loss account and a balance sheet now. But don't worry, the profit and loss accounts of these businesses won't be public. And if you’re skipping audits, you need to declare it on your balance sheet.
Companies House is going digital, aiming to handle all correspondence electronically and requiring iXBRL-tagged accounts. The joint filing of accounts with HMRC through CATO won’t last long.
Verification of Identity: Everyone in certain roles—directors, significant controllers, or anyone making filings at Companies House—needs to prove who they are with passport-like identification. This applies to both companies and LLPs. We’ll step in to handle this identification process for our clients.
Annual Confirmation Statements: Now, there’s a need for a 'lawful purpose' statement during incorporation and in each annual confirmation statement. You'll also have to confirm directors' identities, verify the registered address, and if you're aiming for an audit exemption, prove you meet the criteria.
Register of Members: Companies can't rely on Companies House to keep their member register anymore. They’ve got to handle it themselves and provide a full shareholder list in the next confirmation statement. Details of nominee holdings will be required too.
Corporate Directors: A UK company or LLP can only have one corporate director on the board, and they've got to be registered in the UK.
Communication with Companies House: Companies House is pushing for all electronic correspondence. They’ll ask for an email address and a physical one, ditching P.O. box addresses.
Registrar's Powers: The Registrar's getting more power to ensure accurate data and transparency, even changing company names or flagging if there's dodgy data. They can impose penalties for breaches and share data with government and law enforcement.
If you aren’t a client yet, do reach out as we can help you comply!
We offer complete range of company secretariat services. Our Annual Compliance Fee covers everything from acting as your company secretary, being the first point of contact on all matters relating to Companies House, providing an email contact point, registered office, maintaining all statutory records and filing the confirmation statement.