Policy & Compliance
recorded by obtaining an acknowledgment of delivery; • A prohibition on new directors acting where their appointment has not been notified to Companies House within 14 days of appointment and for so long as the notification remains outstanding; • Changes to the rules on company registers, including the abolition of the requirement for companies to keep their own registers of directors, directors' residential addresses, secretaries and people with significant control; • New protections against the misuse of company and business names; • New company incorporation requirements to include a statement by subscribers that the company is being formed for a lawful purpose; • A new statement in the annual confirmation statement that the company’s future activities will be lawful; • A one-off requirement for existing companies to provide a snapshot of membership information; • The streamlining of the filing framework for small and micro- entity companies; • Enhanced protection of personal information provided to Companies House to protect individuals from fraud and other harms. Main changes From a Companies House viewpoint, the main changes can be summarised as: • Introducing identity verification for all new and existing registered company directors, people with significant control, and those who file on behalf of companies; • Broadening of powers to become a more active gatekeeper over company creation and a custodian of more reliable data; • Improving the financial information on the register so that the register is more reliable and accurate, reflecting the latest advancements in digital technology and enabling better business decisions; • Providing Companies House with more effective investigation and enforcement powers, and increasing its ability to share relevant information with
partners; • Enhancing the protection of personal information to protect individuals from fraud and other harms. Active role In effect Companies House will no longer be a passive receiver and recorder of data. The institution will be expected to play a much more active role in challenging and verifying data to ensure that companies are legitimate. The first impression of the legislation is that it intends to ensure that companies comply with their requirements to provide the correct data, file their records, etc, completely and on time with Companies House. This information will be publicly available. It has to be hoped that better data will lead to better decision- making processes and allow all businesses to make informed judgements about companies, which for BIFA Members includes being able to determine where a company is ‘established’. Having read the legislation, and solicitors comments on it, the primary aim is to prevent UK- registered companies committing fraud and being used as a front by overseas entities to hide criminal activities. Whilst not primarily designed to help our Members deal with the issue of NETPs, BIFA will engage with Companies House to ensure that it is made aware of the opportunity to assist wider government efforts to close this loophole. From BIFA’s viewpoint, the provision of an ‘appropriate address’ and e-mail contact information is of particular interest because this sort of information, if freely available, could be a useful indicator of ‘establishment’. We do not anticipate that the legislation or enhanced role of Companies House will lead to a simple tick box to indicate whether or not the company is an NETP. It is hoped that the Customs agent will be able to access more accurate information to decide whether or not a business entity is ‘established’ in the UK. In BIFA’s opinion, this will assist all by closing the current ‘tax gap’.
“ It has to be hoped that better data will lead to better decision- making processes and allow all businesses to make informed judgements about companies, which for BIFA Members includes being able to determine where a company is ‘established’
moment no further actions will be required. Much of the legislation is directed at reducing fraud by improving the scrutiny processes to improve the quality and reliability of the collected data. What is unclear is in what format this information will be provided to enable verification checks to be conducted by Customs agents to determine whether or not the importer is ‘established’. From a Company’s viewpoint, Part1 of the ECCTA includes many changes to the Companies Act 2006 to increase transparency and reduce the risk of abuse. In summary these include: • Identity verification for all new and existing registered company directors, people with significant control and those who file on behalf of companies; • A new requirement for companies to provide Companies House with an email contact address; • A new requirement for a registered office address to be an ‘appropriate address’, in other words one at which, in the ordinary course, a document addressed and delivered to the company would be expected to come to the attention of someone acting for the company and where the delivery can be
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