The Economic Crime and Corporate Transparency Bill has introduced some big changes to company law and proposed changes to the way that companies must file their annual accounts.
Over the last couple of years, there have been several government consultations on the proposed changes with key proposals including:
Identity verification
compulsory identity verification for all directors, People with Significant Control and those filing information on behalf of a company. The Government has proposed that once identity verification has been introduced, all company directors will have to verify their identity with Companies House before they can incorporate and a director's appointment will not have legal effect until their identity has been verified.
Reforms to Companies House powers
Companies House will have stronger powers to query, seek evidence for, amend or remove information and to share it with law enforcement partners when certain conditions are met. Currently, Companies House is required to accept documents which are filed in good faith and place them on the register. One of the most important changes is to give Companies House the power to query information being filed and ask for evidence to support this, where appropriate. The Government issued a further consultation about how this power would work in practice which closed in February.
Register of Directors:
It is proposed to remove the requirement for companies to keep their own Register of Directors so that the register held by Companies House will become the single, verified source of information for this. The Government is also considering the position on some of the other registers, such as the Register of Secretaries and the Register of People with Significant Control (although it has said it is unlikely to remove the requirement to keep a Register of Members).
Protecting personal information
This includes improving the processes for removing personal information from the register, including people's signatures, the day of date of birth and residential addresses.
Company accounts
The Government has consulted on how to improve the way financial information is filed with Companies House. This includes requiring accounts to be delivered digitally and to be fully tagged. It is also proposed that the timescales for filing accounts will be shortened.
Ban on corporate directors
The Government legislated in 2015 to ban the use of corporate directors but these provisions were never brought into force. The Government now proposes to implement the ban, but with a 'principles' based exemption. This would mean that a company will only be able to appoint a corporate director if all the corporate director's directors are natural persons whose identities have been verified by Companies House.
What are your thoughts on the proposed changes?
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