- The Economic Crime and Corporate Transparency Act 2023 (the Act) aims to prevent the abuse of UK corporate structures and tackle economic crime. The Act, inter alia, sets out the reform of the Companies House legal framework for an increasingly digitalised economy. The changes will give the Registrar of Companies a new function to maintain the integrity of the register of companies through, for example, powers to query suspicious appointments or filings, request further evidence or reject a filing. The identity of directors, partners, people with significant control and directors of overseas companies must be verified.
- To continue filing documents, for example, at Companies House, all third parties (authorised corporate services providers) must register.
- The law regulating limited partnerships, including Scottish limited partnerships, will be modernised. It will tighten registrations requirements, increase transparency requirements and enable the Registrar, in certain circumstances, to deregister limited partnerships.
- The Act also introduces a new offence of the failure to prevent fraud. If fraud is committed by an employee and the organisation benefits, the organisation must be able to demonstrate it had reasonable measures in place to deter the offence or risk being fined. The government guidance on "reasonable measures" to prevent fraud is expected to be published in May 2024.
- Timing: a phased approach to implementation of the Act has been adopted, with the Act expected to be fully in force by 2025 (with some elements already in force and more likely to come into force in 2024).
Resources (click to open)
- Changes to UK company law (gov.uk)
- Economic Crime and Corporate Transparency Bill 2022: Factsheets (Home Office, Department for Business and Trade, HM Treasury, Ministry of Justice, Serious Fraud Office, and Department for Business, Energy & Industrial Strategy, October 2023)
- Economic Crime and Corporate Transparency Act 2023 (legislation.gov.uk, October 2023)
