Policy & Compliance
New legislation broadens Companies House’s powers so that the Registrar will become custodian of more reliable data. However, Customs agents will still need to remain vigilant Corporate due diligence in light of new legislation
good faith. Consequently, the fact of registration alone could not, in our view, provide sufficient certainty that a registered company was indeed established. The Economic Crime and Corporate Transparency Act 2023, and the amendments it introduces, will now allow Companies House to verify identity for all new and existing registered company directors, people with significant control, and those delivering documents to the Registrar. This should result in a significant improvement of the accuracy of Companies House data, consequently leading to an increased level of transparency, accuracy and, most importantly, reliability of information. The legislation broadens Companies House’s powers so that the Registrar can play a more active role over company creation and become custodian of more reliable data. The new powers will allow for checking, removing or declining information submitted to, or already on, the companies register, thus allowing for retrospective validation of data. This, as mentioned above, is a clear departure from the passive role Companies House adopted previously. Warnings But there are caveats. Clearly the new powers will, as mentioned above, improve the overall quality of data that traders will have for their perusal. Security and transparency of conducting business transactions should also improve. Yet, the sheer volume of data the Companies House register stores means that changes will be slow and will not happen immediately. And that is despite head count increases that Companies House is planning. What this means for Customs agents is that their internal due diligence procedures will, as always, be vital to ensuring compliance but most importantly protecting the company from the unwanted consequences of representing a non-established business. Scan the QR code to view the explanatory video created by Companies House.
R epresentation and considered a ‘standing agenda’ point for both BIFA Members and the secretariat. And it is so for a good reason as understanding one’s position in the supply chain is an essential part of a successful due diligence and compliance programme. Considering the above, BIFA would like to draw Members’ attention to the Economic Crime and Corporate Transparency Act 2023. An act which significantly amends the Companies Act 2006 and delivers additional powers for validation of data provided to Companies House (Registrar of companies). But why is it important? The current guidance on establishment establishment for Customs purposes can almost be for Customs purposes may be viewed as rather liberal in its approach. When reading the guidance, one will come across the following statement: ‘A company is established in the UK if it is incorporated at Companies House.” The statement itself may seem clear and follows the Companies House requirement for businesses to have registered in the UK but, BIFA always argued that incorporation at Companies House alone might not be enough to consider a company established – and there were good reasons to support this view. The main one being the fact that Companies House did not check or validate information provided by companies for the purpose of registration. Consequently, there was no guarantee that a business registered in Companies House was indeed established in a meaningful way which could be derived from UK legislation or Companies House’s own requirements. That is despite the fact that rules relative to UK
“ The new powers will allow for checking, removing or declining information submitted to, or already on, the companies register, thus allowing for retrospective validation of data
establishment can be found in a number of legal acts including the Companies Act 2006 (2006 Act) or The Overseas Companies Regulations 2009. For example, the Companies Act 2006, Article 1261 (2) defines UK establishment as follows: (2) For the purposes of this part, a body is to be regarded as “established in the United Kingdom” if and only if: (a) it is incorporated or formed under the law of the United Kingdom or a part of the United Kingdom, or (b) its central management and control are exercised in the United Kingdom. Companies House guidance and case law have clarified that the above means having a physical presence in the UK, for example an office or a place that the establishment regularly conducts its business. Yet, as mentioned above, Companies House never checked the correctness of information provided by traders and information was only accepted in
12 | May 2024
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