Reforms in Company Law: How the ECCTA 2023 Will Bring Transparency

Since its inception as an official executive agency in 1988, Companies House has promoted trust and transparency in UK Businesses to help tackle financial crime. It incorporates, maintains, and dissolves UK companies.

Companies House has a significant challenge managing over 5 million registered UK limited companies and incorporating more than 500,000 new companies annually. This has led to a few issues:

📺 Fictional characters such as Donald Duck have been listed as directors of companies registered on Companies House.

🆔 Although an identity check is required to buy an energy drink, it is not required to establish a company.

Enterprises rely on Companies House data to verify their clients and make millions of business decisions.

From October 2023, the Economic Crime and Corporate Transparency Act 2023 (ECCTA) enables Companies House to:

• Investigate information
• Reject any non-legitimate information
• PO boxes can no longer be registered as an office address
• Introduce an intelligence hub to mitigate suspicious activity proactively
• Perform identity verification which will become mandatory for anyone setting up, controlling, or owning a company in the UK
• Add a confirmation clause so that all new and existing companies annually declare their business activities are lawful

Companies House stated this act introduced the biggest changes since corporate registrations were established in 1844. The enhanced powers came into effect on 4th March 2024.

The act will ensure:

📝 All documents are updated promptly

✅ All information on the register is integral

🎯 Companies House business plan 2024/5 states the priority is to investigate and correct any known erroneous data first followed by other changes.

At Qkvin we look forward to these changes. Also, here you can read the full article.