The Economic Crime and Corporate Transparency Act 2023 – Notification Requirements

The Economic Crime and Corporate Transparency Act 2023 (the “ECCTA”) was introduced in October 2023.  One of the key aims of the ECCTA is to improve the accuracy of the information kept at Companies House.  Currently it is not uncommon for information on the Companies House record to be out of date, making difficult to accurately identify the directors and/or shareholders of a company and whether their identity has been verified.

The ECCTA is introducing key changes to the obligations on directors and shareholders to ensure that the information at Companies House is correct.  It is therefore more important than ever that directors and shareholders understand their duties in order to avoid facing potential criminal liabilities.

Duties of Directors – Persons with Significant Control

One of the key changes introduced by the ECCTA relates to new obligations on a company’s directors in relation to providing information about a company’s Persons with Significant Control (“PSCs”) or Relevant Legal Entities (“RLEs”).

A PSC is an individual who owns or controls a company (usually owning 25% or more of shares). A RLE is similar to a PSC, but is a corporate body, rather than an individual.

Since 2016 companies have been required to maintain a register of PSCs/RLEs as part of their statutory registers.  The ECCTA is removing this requirement, but this information will instead need to be made available on the company’s online records maintained at Companies House.

Directors of a company will now be under a specific duty to identify all PSCs or RLEs of the company at Companies House.  The directors are also obliged to notify those PSCs/RLEs that the company considers them to be a PSC or RLE, and to request them to confirm their details and the nature of their control over the company so the directors can file this information.

Often a PSC/RLE will have voluntarily provided this information when they acquire shares in the company or when the nature of their control changes, but the ECCTA places an obligation on the directors to chase a company’s PSCs/RLEs for these details if the PSC/RLE has not already notified the company.

If a PSC/RLE fails to respond to the directors’ request for information, the directors should report this to Companies House.  If directors suspect that someone has become a PSC or RLE, but has not had confirmation from the PSC or RLE themselves, the directors must identify the suspected PSC/RLE at Companies House but state that this has not been confirmed.

Duties of Directors – Directors and Secretaries

The ECCTA also places an obligation on companies to notify Companies House if there have been any changes to the name, service address and residential address of a director or company secretary (if one has been appointed).

A summary of the information required to be kept up-to-date at Companies House is shown below:

Required Information – Directors Required Information – Secretaries
Name, date of birth and nationality Full name
A service address (often the company’s registered office) A service address (often the company’s registered office)
Usual residential address. Principal office (if a corporate secretary)
Registered number (if a corporate secretary)

Repercussions of Failing to Provide Information when required

All changes to any of this information must be notified to Companies House within 14 days of the relevant change (21 days for corporate secretaries).  Failure to notify in this time frame may result in criminal liability for the company and each of its directors may be liable to a fine.

The ECCTA goes a step further, providing that directors may be disqualified from holding the position of a director in any company if they have been found to have failed to comply with filing obligations on three or more occasions in a five year period.  It is therefore more important than ever to ensure that the necessary information is filed at Companies House on time.

Duties of Shareholders and PSCs/RLEs

The ECCTA places obligations on the shareholders of a company as well as its directors.  In particular, shareholders are now under an obligation to notify the directors when they become a PSC or RLE and of the nature of their control over the company.

Further, shareholders are required to notify the directors if the nature of their control over the company changes (for example, because the shareholder has sold some of their shares) or if they have ceased to be a PSC/RLE (for example, because they have sold all of their shares).

Directors Shareholders, PSCs, RLEs
Duty to find out about PSCs or RLEs Duty to notify the company on becoming a PSC/RLE.
Duty to notify PSCs or RLEs. Duty to notify the company of any changes to their PSC/RLE information.
Duty to find out about changes to information about PSCs or RLEs. Duty to notify the company of ceasing to be a PSC/RLE.
Duty to find out about people ceasing to be a PSC or RLE.
Duty to notify the Registrar if a PSC or RLE fails to comply with notices (at all or on time).
Duty to notify Companies House of any changes to required information.
Duty to notify when someone is no longer a PSC/RLE.

This article only explores a small number of the changes introduced by the ECCTA. For further information on the changes introduced by the ECCTA, please contact a member of the Corporate & Commercial team at HK Law.

Author: Liam Voysey, Solicitor in the Corporate & Commercial team based in Dorchester.

This article is intended for guidance only and is not legal advice.

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