Companies House steps up its game – Not before time

Over the years TCA has been in existence we have often criticised the rather lackadaisical way Companies house has investigated data provided on application of new companies.

Part of the TCA investigation process is to look for company registration details, in many cases we find that scam companies are in fact legally registered and wonder how this is allowed. The good news is that all is about to change with The Economic Crime and Corporate Transparency Act receiving royal assent on 26 October 2023.

The new rules

The act introduces the biggest changes to Companies House since corporate registrations were established in 1844. From now on Companies House has the power to play a far more significant role in tackling economic crime.

Companies House will introduce a new identity verification process to help deter those wishing to use companies for illegal purposes. Anyone setting up, running, owning or controlling a company in the UK will need to verify their identity to prove they are who they claim to be. Over the coming months, Companies House will explain when these changes will come into effect and how the identity verification process will work. The bad news is that applicants and existing companies don’t need to do anything yet.  

 As part of company reporting, every year the company or its representatives must submit a confirmation statement to Companies House. The Economic Crime and Corporate Transparency Act has introduced important changes to the confirmation statement. 

The confirmation statement confirms the information Companies House hold about the company is up to date. Companies must file a confirmation statement even if there haven’t been any changes during the review period.

Registered email address

Under the act, all companies need to provide a registered email address. Companies House will use this email address to communicate with the company, it will not be available to the public.  

New companies need to give a registered email address when they incorporate, from 4 March 2024.  Existing companies need to give a registered email address when they file their next confirmation statement, with a statement date from 5 March 2024 onwards.

Statement to confirm the company is lawful

All companies need to confirm that the intended future activities of the company will be lawful. This will need to be confirmed every year on the confirmation statement. Companies will not be able to file a confirmation statement without this statement. This applies to all confirmation statements with a statement date from 5 March 2024 onwards. 

Investigation, enforcement and data sharing

More effective investigation and enforcement powers for Companies House, and new powers to share data with law enforcement agencies and other government departments. This is extremely welcome as it allows a reporting channel direct rather than third party agencies such as Action Fraud, although in the case of obvious fraud, a report to Action Fraud should also take place. 

TCA comment

As we stated above, not before time. As an organisation, TCA has exposed many fraudulent companies who are all legally registered with Companies House, simply because the ability to register a company has been far too easy. On top of that the reporting systems have been far too weak.

The normal pattern of the life of a scam company is that the company is either set up from fresh or an “off the shelf” company is purchased. In almost 100% of cases, the company ceases to exist after one year of trading.

The fraudsters don’t even have to go through the trouble of winding the company up themselves; failure to supply Companies House with a confirmation statement is enough for Section 1000 of the Companies Act 2006 (CA 2006) to kick in which provides the registrar (Companies House) the ability to give three months’ notice before striking off a company from the register.

TCA can only hope that this is one step nearer to stopping the establishment of fraudulent companies. We also hope that with time, The Economic Crime and Corporate Transparency Act gets strengthened even more to make rogue companies a thing of the past.

For more information regarding this article or assistance in any other timeshare related issues please contact the TCA on 01908 881058 or email: info@TimeshareConsumerAssociation.org.uk