The government’s Economic Crime and Corporate Transparency Bill, which has been hailed as making the most significant changes to Companies House since it was established in 1844, has had its second reading in the House of Commons and is currently at the committee stage in the House of Commons. It follows on from the Economic Crime (Transparency and Enforcement) Act (ECA), which was passed earlier this year, which created a register of overseas entities to target foreign criminals using UK property to launder money.
Major Reforms to Companies House
This latest Bill, which will complement the ECA, makes substantial reforms to Companies House to transform it into ‘a more active gatekeeper over company creation’ rather than the more passive role of data recipient that it currently fulfils. This will be achieved by granting the registrar wide-reaching investigative and enforcement powers including the following:
- the introduction of identity verification for anyone who wishes to register a company
- enhanced powers to ensure that the data held is reliable. Companies House will be able to check, challenge, remove or decline information provided or already recorded on the register.
- the ability to proactively share with law enforcement agencies any concerns about suspicious activity
Other Key Provisions
The Bill also proposes to:
- introduce measures to prevent the abuse of limited partnerships
- provide additional powers to seize and recover suspected criminal crypto assets
- introduce reforms to give businesses more confidence to share information to tackle money laundering and other economic crime
- provide new intelligence-gathering powers for law enforcement and removal of burdens on business.
Companies House has indicated that, subject to Parliamentary approval, it expects the Bill to receive Royal assent in the spring of 2023 and following on from this, these reforms will require significant secondary legislation and guidance as well as the development of systems at Companies House to implement such extended powers before changes formally come into force.
