Company Law Changes: A guide for business owners

Business owners need to be aware of the new company law changes, some starting immediately.

From March 2024, significant changes will be introduced by the Economic Crime and Corporate Transparency Act 2023. The law aims to combat economic crime while fostering economic growth by enhancing transparency and accuracy on the UK Companies House register. 

Whilst some measures will be phased in gradually, others commenced on 4 March 2024. 

Here are the key changes that will affect you and your business.

A registered email addresses

From 4 March 2024, companies will need to provide a registered email address that Companies House will use for communication with the company. The registered email address will not be available for public inspection.

• Any new company incorporating from 4 March 2024 will need to provide a registered email address.
• Existing companies will need to give a registered email when they file their next confirmation statement with the statement date from 5 March 2024.

Confirmation statements

from 5 March 2024, the law will require that companies will need to confirm that the intended future activities of the company will be lawful.

• This will be an annual requirement, which will need to be stated on the confirmation statement.
• The confirmation statement will not be able to be filed without this statement.
   

Identity verification

• To be implemented over the coming months
• To help deter individuals wishing to use companies for illegal purposes, Companies House will introduce the following requirements:
   

Who needs to verify their identity?

• Directors
• People with significant control (PSC’s)
• Members of a limited liability partnership will also need to verify their identity.
• For existing companies, all directors or equivalent individuals and PSCs will have a transition period to verify their identity with Companies House. The verification period will be confirmed at a later date.

How do you verify your identity?

• Directly through Companies House or through an authorised agent (also known as an Authorised Corporate Service Provider).
• If verifying directly through Companies House, they will put in place a service to verify your identity using ID documents.
• If verifying through an authorised agent, they will have an existing duty to carry out due diligence checks on all their clients. The Companies House identity verification process will build on these existing checks.
   

Changes to company accounts

This will be phased over the following 2-3 years. The law will improve transparency, making more financial information available to the public. The key changes are as follows:

• Filing annual accounts will be completed by software only.
• Companies will be required to file accounts in a digital format, which will require all companies to find suitable software to file their accounts.
• Small company filing options
• For small or micro-entity companies, they will need to file their profit and loss accounts.
• Small companies that do not qualify as micro entities will need to file a director’s report.
• Claiming an audit exemption
• Any company claiming an audit exemption will be required to give an additional statement from their directors on the balance sheet.
• Directors must specify which exemption is being claimed and confirm that the company qualifies for the exemption claimed.

How Birkett Long can help

Our business team has the necessary expertise to take the steps companies need to ensure they stay compliant with the Act. 

If you have any questions concerning these changes to company law, please do not hesitate to contact Tim Field at [email protected] or on 0330 818 3166.