The enactment of the Economic Crime and Corporate Transparency Act 2023 (ECCA) represents a concerted governmental effort to address pivotal concerns, including the enhancement of corporate transparency, the deterrence of economic crime, the fortification of corporate liability, and the facilitation of legitimate economic advancement.
The Act’s implementation has been influenced by several significant corporate scandals and trends, including the 2012 HSBC money laundering scandal, the 2017 Tesco case on false accounting practices, and the Patisserie Valerie case for fraud, just to mention a few.
To facilitate the Act’s objectives, Companies House has been granted powers to verify the identities of company directors, remove fraudulent organisations from the register, and share information with criminal investigation agencies. Additionally, they have the ability to remove inaccurate or misleading information from the register.
Although the act and the examples above imply that it covers the corporate world, its scope encompasses not only the corporate world but also charitable companies. Therefore, all charitable companies must complete certain administrative tasks to comply with these changes.
Digital requirements
Previously, charitable companies could file their accounts through specific software or by posting paper copies to Company House. However, they are now required to file their accounts digitally. The move to filing accounts by software only will be phased over the next two to three years. However, you can still make the change now, although in reality, much of this is in the hands of the accounts production software providers, with charitable company formats often coming after corporate formats.
Registered Office Addresses
Companies must have a registered office address. You are not able to use a PO Box as your registered address from the 4 of March 2024. If you need to change your address, this can be done online using the company’s authentication code. Companies will be struck off the register if the address is not changed within 28 days of Companies House changing it to a default address.
Confirmation Statement
All companies need to confirm that the company’s intended future activities will be lawful. This will need to be confirmed annually and you will not be able to file a confirmation statement without this statement.
Impact on Financial Reporting
Companies House will have greater powers to scrutinise as mentioned above. Therefore, trading subsidiaries must ensure accurate and transparent financial reporting. Inaccurate filings will be rejected.
Given all these changes and increased scrutiny, it’s also important to submit accounts and confirmation statements in a timely manner lest they be rejected for one reason or another and you miss the deadline.
Fee Increase
As a result of increased expenditures, Companies House adjusted its fees effective 1 May 2024.
There is no set date or time frame for some of these changes (unless otherwise stated) but this will be made known well in advance.
For a complete snapshot of the changes, you can view them on Companies House here.
