Changes to companies house ECCTA: 2024

On March 4^th 2024 changes to the Economic Crime And Corporate Transparency Act were made but why and what does this mean for your business?

What is the ECCTA?

The Economic Crime And Corporate Transparency Act (ECCTA) was introduced (on October 2023) to enforce corporate transparency and combat money laundering, fraud, and economic crime in general. The act provides companies house with a wider insight into company information that enforces strict identification measures holding directors and significant personnel accountable. The act in short makes it easier to identify and prosecute companies and senior managers for failure to prevent fraud.

Who do these changes affect?

These changes will apply to organizations that meet two of the three requirements:

more than 250 employees
more than 36 million GBP turnover and/or assets of more than 18 million

What are the changes made?

Registrar’s new power: Companies house has been given the power to query any filings, to request evidence and or reject filings, and remove material from the registrar smoothly.
Falce statement offense: New regulations have been put in place to prevent misleading, false, or deceptive information to Companies House. It will now apply if a person provides misleading, false, or deceptive information without reasonable excuse. There are also now aggravated criminal offenses for knowingly providing misleading information.
Company names: Additional categories of the name are prohibited including those which may be dishonest or deceptive.
Lawful purposes statement: Every confirmation statement will now include a specific confirmation that the company’s intended future activities are lawful. A similar confirmation also needs to be given in any application to incorporate a new company.
Having an appropriate registered office: A company will now need to ensure that it is registered at an appropriate address. This means the address can receive documents from the person acting on behalf of the company and have its delivery acknowledged. PO boxes are no longer permitted.
Registered email address: All companies are required to provide a valid email address which they can be contacted via Companies House. The email must be appropriate meaning that the email must come to the attention of the person acting on behalf of the company. If a company fails to maintain an appropriate email address the company and its directors can be fined.
Companies House’s new changes mean that the Registrar will, have the power to directly impose a financial penalty (of up to £10,000) as an alternative to criminal sanctions.

For a list of full regulations please visit here

How to comply with ECCTA:

Disclose more detailed information about beneficial owners. This enhanced transparency prevents companies from being used for illegal activities.
Conduct thorough due diligence on vendors and partners to enhance checks on money laundering and financial fraud.
Make sure all financial records are accurate.
Regularly audit, and monitor vendor and contract compliance to demonstrate ongoing compliance to the new standards.

Conclusion:

In conclusion, businesses, particularly those meeting the specified criteria, must now comply with a stricter regulatory landscape aimed at corporate transparency and accountability. To comply with the ECCTA, businesses are urged to disclose detailed information about beneficial owners, conduct thorough due diligence on vendors and partners, and maintain accurate financial records to comply with the new standards. Ultimately, these changes signify a proactive approach to combatting financial crime and ensuring companies are held accountable.

A word from us:

We are Liberate IT Services! A responsive MSP company based in the east midlands if your business requires ways to keep your company data secure contact us today!