How will the Economic Crime and Corporate Transparency Act affect businesses?

Economic Crime and corporate Transparency Act 2024

What is the Economic Crime and Corporate Transparency Act 2024?

The new Economic Crime and Corporate Transparency (ECCT) Act will give Companies House increased powers to improve the accuracy of information on their registers and to play a significant role in tackling economic crime.

Companies House will have more powers to scrutinise and challenge information on the register, they will be able to reject incorrect information and apply penalties for existing discrepancies on the register. They will also be able to apply annotations to the register advising that there are potential issues with company information which has been supplied to them.

Additionally, every company (on incorporation and also as part of the annual Confirmation Statement) will be required to confirm that its future activities will be lawful. It is, therefore, vital that, if you prepare your own companies house filings, you ensure the information is correct and compliant.

Companies House will also start introducing new identify verification processes toward the end of 2024.

Enforcement and sanctions

There’ll be serious consequences if a company does not respond to a formal request from Companies House for more information.

This could include:

  • a financial penalty
  • an annotation on the company’s record
  • prosecution

There could also be serious consequences for a company if their registered office is not an appropriate address.

If Companies House are satisfied that a company’s registered office is not appropriate, they will change it to a default address, held at Companies House.

If a company’s registered office is moved to the default address, the company officers must provide an appropriate address with evidence of proprietary ownership within 28 days, or Companies House can start the process to strike the company off the register meaning the company can no longer trade and all company assets will be frozen.

More detailed information can be found for the Economic Crime and Corporate Transparency Act 2023 here.

To stay complaint with HMRC, get in touch with our team today.

Wendy Rutter-Butcher
Wendy Rutter-Butcher
Company Law & Compliance Manager at Treetops Chartered Accountants
About Treetops

Treetops is an established Chartered Accounting firm based in Farnborough, Hampshire. We have clients locally and nationally. For advice and a free consultation please contact us.

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