Reform of Companies House

The Economic Crime and Corporate Transparency Bill (ECCT Bill), first laid in Parliament in September 2022, has now gone to the House of Lords for consideration. The ECCT Bill contains, among other things, draft amendments to the Companies Act 2006 to facilitate the reform of Companies House.

The ECCT Bill follows an initial consultation in 2019, three follow-up consultations in 2020 and the white paper containing the Government’s final plans for reform published in February last year. An easy reference snapshot of the Companies House reform proposals based on the September 2022 draft of the ECCT Bill can be found in our blog post here. In short, the reforms will result in the biggest change in the role of Companies House since it was created in 1844, turning it from a largely passive recipient of information to a much more active gatekeeper.

Various amendments were made to the draft ECCT Bill as it progressed through the House of Commons and Public Bill Committee, including:

• Discrepancy reporting – The government will be given power to make regulations requiring any person carrying on business in the UK to report to Companies House discrepancies between: (i) information they receive from a customer or prospective customer; and (ii) information made publicly available by Companies House. This would be an expansion of the current requirement imposed on certain regulated entities and professionals in the UK, under anti-money laundering legislation, to report to Companies House discrepancies in information that they receive on ‘people with significant control’ (Part 21A of the Companies Act 2006).
• Overseas companies – The government will be given power to make regulations requiring an overseas company that has registered a UK establishment/branch with Companies House to supply a UK address for service and an email address to Companies House. The address for service will be made publicly available (but the email address will not).
• Register of overseas entities that own UK property – Companies House will be given the power to remove information from the new register of overseas entities that own UK property, either of its own volition or on request (for more information on the new register, see our blog post here).

One amendment to the ECCT Bill that was proposed during its passage through the House of Commons, but has not made it into the Bill that has gone to the House of Lords, is the introduction of a corporate offence of failure to prevent fraud, false accounting or money laundering. For further details on this proposal, see this briefing from our corporate crime and investigations team.

The ECCT Bill will now proceed through the House of Lords, and will likely become law before the end of this parliamentary session. We expect it to be brought into force at a later date, so that Companies House can fully prepare for the reforms.