The UK, with its vast and highly accessible economy, stands as a prime destination for international commerce. Yet, this openness also leaves it vulnerable to exploitation by malicious entities, including those engaged in fraud and money laundering activities.
These illicit actions not only finance serious and organised crime within the UK but also support corruption abroad. The presence of illegal financial activities poses a significant threat to businesses and affects the fabric of everyday society, impacting the lives of citizens.
Starting from Monday (4 March), Companies House is employing new, stronger powers to enhance data accuracy and combat misuse of the companies register in accordance with the Economic Crime and Corporate Transparency Act 2023 (ECCT Act).
The act will cover the entire UK and builds on the foundations created by the Economic Crime (Transparency and Enforcement) Act 2022. Other measures in the act, such as identity verification and accounts reform, will be introduced over a longer period.
The initial changes include:
- Enhanced authority to verify information and demand evidence.
- Stricter checks on company names.
- Rules mandating an official address for companies, prohibiting PO Box addresses.
- A requirement for companies to provide a registered email address.
- A necessity for company founders to attest to their lawful intent at incorporation and for companies to declare their future activities as lawful in their confirmation statement.
- Increased ability to correct or remove incorrect information.
- Improved data sharing with government departments and law enforcement.
Additional criminal offences and civil penalties will support these measures.
Easing the impact on businesses
The gradual introduction of these powers aims to reduce the impact on legitimate businesses, with many updates incorporated into standard reporting processes, such as the annual confirmation statement.
Companies House CEO, Louise Smyth said:
"These new and enhanced powers are the most significant change for Companies House in our 180-year history.
"We've known for some time that criminals have misused UK companies to commit fraud, money laundering and other forms of economic crime.
"As we start to crack down on abuse of the register, we are prioritising cases where people's names and addresses have been used without their consent. It will now be much quicker and easier to report and remove personal information that has been misused. This will make a real difference to individuals."
Business Minister, Kevin Hollinrake said:
"Companies House now has the tools to take a much harder line on criminals who take advantage of the UK's open economy and can now ensure the reputation of our businesses is not tarnished by the UK playing host to the world's scammers.
"The new reforms provide further protection to the public from companies fraudulently using their address and will begin to remove the smoke and mirrors around companies hiding behind false information. This will enhance the UK's reputation as a great and safe place to do business."
As further measures are introduced, Companies House will let those who file information with Companies House know what they need to do via its communications channels and campaigns.
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