Business leaders beware of new laws tackling economic crime

This insight is part of our Legal Business News | Winter 2025 series. Explore the full series at the end of this piece.

Tackling economic crime and improving corporate transparency is a key focus of the government. A package of measures is being introduced, which will create significant new obligations for UK business owners and directors, who should make sure that they are familiar with all the new rules.

The Economic Crime and Corporate Transparency Act 2023 (the Act) received royal assent on 26 October 2023. It is part of a legislative package aimed at tackling economic crime and introduces significant reform of Companies House. The Act will create significant new obligations for UK business owners and directors, who should make themselves familiar with all the new rules.

The Act comes into force in stages; some of its provisions have already commenced, and others are due to come into force over the next couple of years.

Reasons for the Act

The purpose of the Act is to address three key objectives:

to prevent organised criminals, fraudsters, kleptocrats and terrorists from using UK companies to abuse the UK’s open economy;
to strengthen the UK’s response to economic crime;
to enable Companies House to deliver a better service to improve the reliability of its data to help inform business transactions.

In this insight, we highlight five key changes affecting companies and LLPs under the Act, although there are additional changes not mentioned here. (Changes 1, 2 and 3 are already in force, with 4 and 5 currently expected by the end of 2026.)

1. Registrar’s objectives and powers

In March 2024, provisions of the Act came into force which introduced new objectives for the Registrar of Companies. The Registrar’s objectives are to:

ensure that any person required to deliver documents to the Registrar does so, and that the requirements relating to proper delivery are complied with;
ensure that information contained in the Companies House register is accurate and that the register contains everything it ought to contain;
minimise the risk of information on the register creating a false or misleading impression to members of the public; and
minimise the extent to which companies and others carry out unlawful activities or facilitate others carrying out unlawful activities.

In addition, the Act gives the Registrar new powers to help fulfil these objectives. This fundamentally transforms the role of the Registrar from merely receiving and recording information to actively ensuring the reliability of data. These powers are retrospective and allow Companies House to question items on the register before the Act comes fully into effect.

The Registrar’s new powers include the power to:

strike off a company registered on a false basis;
require filings to be delivered electronically;
reject documents for filing that are inconsistent with other information held by the registrar;
require inconsistencies in filings to be resolved; and
issue financial penalties of up to £10,000 to people who engage in conduct amounting to an offence under certain provisions of the Companies Act 2006.

2. Company names and business names

In addition to Companies House being able to challenge registered company names, business names (also known as trading names) became subject to further controls from March 2024. As with the restrictions on registered company names, a company is prohibited from carrying on business under a name that gives a false impression that it is connected with a foreign government, or one that carries a risk of harm to the public.

See our previous article.

3. Registered office address and email address

The Act imposes a duty on companies to ensure that they have an appropriate registered office address. All companies incorporated from 4 March 2024 need to be incorporated with an appropriate registered office address. Existing companies will be required to change their registered office to an appropriate address when they file their annual confirmation statement, if their current registered office address is not ‘appropriate’.

The intention behind this provision is to:

ensure companies do not use PO Boxes for their registered office address; and
prevent innocent parties having their addresses misappropriated.

A registered office address will be appropriate where:

documents sent to the registered office address and addressed to that company are expected to reach the attention of a person acting on behalf of the company; and
the delivery of documents to that address is capable of being recorded by obtaining a delivery acknowledgement.

Companies House has confirmed that companies may use a service provider’s address (such as their accountants’ or solicitors’ offices), provided that the service provider’s address meets the requirements above.

If the Registrar is not satisfied that a company’s registered office is appropriate, the Registrar has the power to take steps to change the registered office address.

Companies are also required to maintain a registered appropriate email address with the Registrar to allow the Registrar to communicate with the company by email. An email address will be appropriate where emails sent by the Registrar to that address are expected to come to the attention of a person acting on behalf of the company. The registered email address will not be available for public inspection. These provisions apply to all companies incorporated after March 2024, and for existing companies, with effect from the date of their confirmation statement.

4. Directors

It is already a requirement that notice of a new director’s appointment must be sent to Companies House for filing within 14 days of their appointment. It will become an offence punishable by a fine for an individual to act as a director of a company unless the company has notified Companies House of the director’s appointment within that 14-day time limit. Currently, there is no maximum limit to this amount of this fine if the individual is prosecuted, but if Companies House raises a fine, the fine is capped at £10,000.

However, the director’s appointment will not be invalidated by the failure to notify their appointment within the relevant time limit.

See our previous article.

5. Statutory registers

There will also be important changes to the statutory registers that all companies are required to maintain.

Companies will no longer be required to maintain their own register of directors, register of directors’ residential addresses, register of secretaries and register of people with significant control. Instead, all relevant information will be held by Companies House, and most of that information will be available on the public register.

Companies will be required to record and maintain additional information in their register of members, such as the member’s forename, surname and service address. The Act will also introduce an obligation on a new member to provide the company with the required information within two months of the date they become a member, and to keep the company informed of changes to their details. It will become an offence for a member to fail to comply. In addition, a company should not register a transfer of its shares unless satisfied that it has the information that is required to enter in its register of members in relation to the transferee.

Help from the experts

The Act requires companies to be more transparent to help combat economic crime and improve corporate transparency. This increases the burden on companies, directors and company secretaries to keep on top of the new rules. Moore Kingston Smith’s legal team and company secretarial team can guide you through the new obligations, helping your company to remain compliant.

If you have any questions about these changes, please contact us.

This article is for information purposes only. It does not constitute legal advice and should not be relied on or treated as a substitute for specific advice relevant to particular circumstances.