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Economic Crime And Corporate Transparency Act 2023

Commentary on provisions of the Act

Part 1: Companies House Reform

The registrar of companies

Section 1: The registrar’s objectives

  1. Section 1 inserts into the Companies Act 2006 a new provision, section 1081A, obliging the Registrar, in performing her functions, to seek to promote four objectives.
  2. Objective 1 is to ensure that those required to deliver documents to the Registrar do so, and that the requirements relating to proper delivery are complied with.
  3. Objective 2 is to ensure that all information held by the Registrar in registers she is required to maintain under any enactment is accurate and the registers contain everything they ought to contain. In contrast to Objective 1, which concerns cases where there are legal obligations to deliver documents, Objective 2 additionally concerns cases where filings are permitted rather than obliged (for example, under section 87 of the Companies Act 2006 which allows a company to file a notice with the Registrar concerning a move to a different registered office address).
  4. Objective 3 is to ensure that information kept by the Registrar does not create a false or misleading impression to members of the public.
  5. Objective 4 is to prevent companies and others from (a) carrying out unlawful activities; or (b) facilitating the carrying out by others of unlawful activities.
  6. The intention of these objectives is that the Registrar should seek to maintain the integrity of the registers she curates in relation to companies and other registrable entities, by seeking to promote the objectives when exercising the Registrar’s functions.

Company formation

Section 2: Statement as to lawful purposes

  1. Although section 7(2) of the Companies Act 2006 establishes that a company should not be formed for unlawful purpose, this section (Statement as to lawful purposes) amends section 9 of the Companies Act 2006 to introduce a requirement for those forming a company expressly to state that its purposes will be lawful. If that is proven not to be the case, the false filing offence will have been committed and the filing will not have been "properly delivered" within the meaning of section 1072, which would entitle the Registrar to reject it.

Section 3: Information about subscribers

  1. This section amends section 9 of the Companies Act 2006 (registration of documents) to expand the information that an application for the formation of a company must contain about its "subscribers". It must now include:
    1. a statement of the required information about each of the subscribers to the memorandum of association (see section 9A).
    2. a statement that none of the proposed company’s subscribers are disqualified directors. The definition of a disqualified person is provided in section 159A(2) of the Companies Act 2006. It covers persons disqualified under the Company Directors Disqualification Act 1986 and the Company Directors Disqualification (Northern Ireland) Order 2002. This definition concerns not only persons subject to disqualification orders and undertakings, but also: undischarged bankrupts, persons subject to bankruptcy restrictions order or undertakings, debt relief restrictions orders or undertakings and moratoriums under the debt relief orders, as well as persons subject to director disqualification sanctions under the Sanctions and Anti-Money Laundering Act 2018 ("SAMLA 2018"). If a proposed subscriber is a disqualified director who has received permission of a court to act as a director in the jurisdiction in which the company is registered, or they have been granted authority to act via a licence under the SAMLA 2018, the application must contain a statement to this effect providing detail about the court permission or licence where relevant.
  2. If the application does not include the information or statements required under section 9(3A), or if they are false, the Registrar will be able to reject the application to form a company.
  3. This section also inserts new section 9A into the Companies Act 2006. In the Companies Act 2006 and associated regulations there is no definition of "name" for subscribers to a memorandum of association, such that an individual subscriber could state their name is J Bloggs. Section 9A defines "name" as forename and surname, and in the case of a peer or individual usually known as a title, that title may be stated instead. This has the effect of requiring Joe Bloggs instead of J Bloggs, which provides more transparency as to who an individual subscriber is.
  4. There is currently no distinction made between subscribers who are individuals and subscribers who are body corporates or firms that are legal persons under the law by which they are governed. Section 9A also makes that distinction by separating the requirements, but the required information remains the same for both – name and service address.
  5. A power is provided to amend the subscriber information requirements and two similar powers are removed from the Companies Act 2006.

Section 4: Proposed officers: identity verification

  1. This section amends section 12 (statement of proposed officers) of the Companies Act 2006.
  2. It adds a new requirement of an application to form a company, which must now include a statement confirming that the proposed company’s directors have verified their identity. If an application to form a company does not include a statement under section 12(2A), or this statement is false because proposed director has not verified their identity, the Registrar will reject this application and this company will not be formed.
  3. This section also allows transitional provisions to be made under the commencement section in this Act. The transitional provision may require companies incorporated before this section comes into force, to deliver their statement to the effect as under section 12(2A) at the same time as they file their annual confirmation statement.

Section 5: Proposed officers: disqualification

  1. This section amends section 12 of the Companies Act 2006 (statement of proposed officers) to require that applications to register a company include a statement by the subscribers to the memorandum of association that none of the proposed directors are disqualified directors under directors’ disqualification legislation, or are otherwise ineligible to be a director.
  2. If a proposed director is disqualified, but has received permission of a court to act as a director in the jurisdiction in which the company is registered, or they have received a licence granting them authority to act under section 15(3A)(a) of the Sanctions and Anti-Money Laundering Act 2018 ("SAMLA 2018"), the application must contain a statement to this effect, specifying particular details of the permission or the licence. If the application does not include a statement required under section 12(4), and (5) or (7) or they are false, the Registrar will reject the application to form a company.
  3. The definition of a disqualified person is provided in section 159A(2) of the Companies Act 2006. It covers persons disqualified under the Company Directors Disqualification Act 1986, and the Company Directors Disqualification (Northern Ireland) Order 2002. This definition concerns not only persons subject to disqualification orders and undertakings, but also: undischarged bankrupts, persons subject to bankruptcy restrictions order or undertakings, debt relief restrictions orders or undertakings and moratoriums under the debt relief orders, as well as persons subject to director disqualification sanctions under the SAMLA 2018.
  4. This section also amends section 16(6) of the Companies Act 2006 by stating that a person ineligible for appointment by virtue of any enactment, cannot be deemed appointed as a director or as a secretary or joint secretary of a company, as a result of the registration of a company.

Section 6: Persons with initial significant control: disqualification

  1. This section amends section 12A of the Companies Act 2006 (statement of initial significant control) to require that applications to register a company include a statement that none of the proposed registerable persons or registrable Relevant Legal Entities (RLE) are disqualified under directors disqualification legislation.
  2. Part 21A of the Companies Act 2006 contains provisions concerning persons with significant control over companies (section 790C(2)-(4)) and relevant legal entities that have significant control over companies (section 790C(5)-(8)). Persons with initial significant control and relevant legal entities are defined in section 12A(4) as registrable persons and registrable RLEs respectively.
  3. Proposed registrable persons or registrable RLEs who are disqualified under directors’ disqualification legislation but have either a court’s permission or the authority of a licence under section 15(3A)(a) of the Sanctions and Anti-Money Laundering Act 2018 ("SAMLA 2018") to act as director must include a statement to that effect in the application specifying particular details of the permission or licence. The Registrar will accept applications to register companies if this is the case.
  4. The definition of a disqualified person is provided in section 159A(2) of the Companies Act 2006. It covers persons disqualified under the Company Directors Disqualification Act 1986 and the Company Directors Disqualification (Northern Ireland) Order 2002.. It concerns not only persons subject to disqualification orders and undertakings, but also: undischarged bankrupts, persons subject to bankruptcy restrictions order or undertakings, debt relief restrictions orders or undertakings and moratoriums under the debt relief orders, as well as persons subject to director disqualification sanctions under the SAMLA 2018.

Section 7: Persons with initial significant control: identity verification

  1. This section amends section 12A of the Companies Act 2006 (statement of initial significant control) and allows the subscribers to make statements confirming that the future company’s People with Significant Control have verified their identity. Subscribers can make such statements if on incorporation they become People with Significant Control.
  2. Under section 12B(2) subscribers can confirm in the application for the registration of a company, that an individual, who is a future person with significant control, has verified their identity according to section 1110A.
  3. If on incorporation, a legal entity becomes a Relevant Legal Entity of an incorporated company, its subscribers can include statements under section 12B(3) and (4) in the application to form this company. Under section 12B(3) subscribers can notify the Registrar about individuals who are the verified relevant officers in the future Relevant Legal Entities. If subscribers include the statement under section 12B(3) it must be accompanied by statements of the relevant officers, confirming that they are the relevant officers as defined under section 790LK(6) in relation to the Relevant Legal Entities.
  4. This statement is optional. If the statement under this section is not attached to the application to register a company, the registration will be successful. The Registrar will however subsequently direct the registrable RLE or the Person with Significant Control to provide the equivalent statements under sections 790LI or 790LK.

Company names

Section 8: Names for criminal purposes

  1. This section inserts section 53A into the Companies Act 2006, which provides the Secretary of State with the ability to prevent the registration of a company where the purpose of its proposed name, in the Secretary of State’s opinion, is to facilitate what would, in the UK, constitute an offence of dishonesty or deception. Subsection 53A(b) makes clear that conduct that would take place outside the territory of the UK may also be considered by the Secretary of State.
  2. A consequential amendment by section 9(3) of the Act is made to section 1047(4) of the Companies Act 2006, so that section 53A applies to overseas companies.

Section 9: Names suggesting connection with foreign governments etc

  1. Section 54 of the Companies Act 2006 already provides that the Secretary of State’s approval must be obtained for the use of a company name which implies a connection with the UK Government, devolved administrations and local authorities in the UK and other public bodies specified by regulation. This section broadly adds to that prohibition, inserting section 56A into the Companies Act 2006. This new section gives the Secretary of State the ability to prevent the registration of a company with a proposed name, which, in the Secretary of State’s opinion, suggests a connection, where none exists, with a foreign government or its offshoots or with international bodies such as the United Nations or NATO.
  2. A consequential amendment in subsection 10(3) inserts subsection 1047(4)(bza) into the Companies Act 2006. This applies the new prohibition of section 56A to overseas companies.

Section 10: Names containing computer code

  1. This section inserts section 57A into the Companies Act 2006. Section 57A obliges the Secretary of State not to register a company under a name which consists of, or includes, what in the Secretary of State’s opinion is computer code. Computer code embedded in an IT database can maliciously infect the systems of those who access or download data to their own systems.

Section 11: Prohibition on re-registering name following direction

  1. This section inserts section 57B into the Companies Act 2006. Section 57B provides that where specified Registrar powers of direction to change a name have been exercised and a company’s name has been changed, the company must not subsequently re-register under the name the subject of the direction or one similar to it. Companies which receive an order from the company names adjudicator to change their name, under section 73 of the Companies Act 2006, are also prohibited from re-registering as that name. Where a new name has been determined under section 73(4), which allows the company names adjudicator to determine a new name for a company that fails to change its name in the required period following an order, the company is prohibited from being registered under the original name or a name that is similar.
  2. Subsection 12(3) inserts a provision into section 1047(4) Companies Act 2006 which extends the above provisions to any overseas company required to register particulars.

Section 12: Prohibition on using name that another company has been directed to change

  1. This section inserts section 57C into the Companies Act 2006. Section 57C provides that, where powers of direction to change a company’s name have been exercised and a company’s name has been changed, the original name or one similar to it cannot be re-used in the formation of another company where an officer or shareholder of the initial company has similar involvement in the new company.
  2. Subsection 57C(2) relieves a company from this prohibition, provided they have the approval of the Secretary of State.

Section 13: Directions to change name: period for compliance

  1. At present the Companies Act 2006 leaves it to the discretion of the Secretary of State to determine the time period within which a company must comply with a direction to change its name. This section inserts provisions into various sections of the Companies Act 2006, in some cases providing for substitute subsections. In total, they standardise the various direction issuing powers found in Part 5 of the Companies Act 2006 and those that are inserted by this Act.
  2. This section sets the period for compliance in these direction issuing powers at 28 days from the date of the direction whilst, in certain circumstances, giving the Secretary of State discretion to extend that 28-day period. This section also makes changes which provide that, where a company has been directed to change a name which gives a misleading indication of its activities, the company has three weeks from the date of the direction to apply to the court for it be quashed and it can continue to use the name until the court has made its decision.

Section 14: Requirements to change name: removal of old name from public inspection

  1. The Companies Act 2006 contains various powers of the Secretary of State to direct a company to change its name. This section inserts into various direction issuing powers of Part 5 Companies Act 2006 provisions which allow the Registrar to omit from the material that is available for public inspection references to the company’s name, where the company has been given a direction to change its name. The amendments inserted by this section brings all direction issuing powers to parity, allowing the Registrar to omit material from the public register whenever necessary.

Section 15: Objections to company’s registered name

  1. Section 69 of the Companies Act 2006 sets out how objections to a company name are to be considered by the company names adjudicator established under section 70 of the Act. Section 16 amends section 69 in a number of ways.
  2. First, Section 16(2) extends eligible objections to those where the applicant asserts that another company’s ("the respondent’s") use of a name in any jurisdiction is likely to mislead the public in any such jurisdiction into thinking the respondent’s company has a link to the applicant’s company.
  3. Secondly, this section provides that those individuals who were either members or directors of the respondent company when it was registered under the name the subject of the objection can be joined with the company itself in the adjudication proceedings.
  4. At present, section 69(4) provides for circumstances in which, if one or more condition is met, an objection application will not to be upheld. Section 16 removes a set of circumstances around current, planned or past operation of the respondent company. The effect is that the respondent will no longer be able to rely on those factors in defending the objection against its use of a name.

Section 16: Misleading indication of activities

  1. This section modifies section 76 of the Companies Act 2006, particularly the basis upon which the Secretary of State can direct a company to change its name; where the Secretary of State is of the view that it gives a misleading indication of its activities. It extends the Secretary of State’s discretion by broadening the applicable context of harm to the public and making it clear that such harm can potentially manifest outside the UK.

Section 17: Direction to change name used for criminal purposes

  1. An earlier section in the Act establishes the principle of prohibiting incorporation of a company the name of which might be used for criminal purposes. This section extends the principle to company names already on the Register and gives the Secretary of State powers to take action accordingly.
  2. This section inserts section 76A into the Companies Act 2006, which confers the power on the Secretary of State to direct that a company must change its name where, in the opinion of the Secretary of State, the name has been or is intended to be used to facilitate the commission of an offence of dishonesty or deception or conduct outside of the UK which, were it to have taken place in the UK, would have constituted such an offence.
  3. Specifically, section 76A allows the Secretary of State to issue a written direction giving a company a (potentially extendable) period of at least 28 days to change its name. Once a direction has been issued the Registrar can remove from the public register any reference to the name which is the subject of the direction.
  4. Within the first three weeks of the 28-day compliance period (however extended) the company can apply to the court for the direction to be quashed. Where the court agrees that a change of name is indeed appropriate it will be for it to decide the timescale for complying with the direction and the company will not have to comply before the court has reached its decision.
  5. Failure to comply with a direction is an offence on the part of the company and all officers in default including shadow directors and it attracts, on summary conviction, a fine of up to level 3 on the standard scale as well as a daily default of up to one-tenth of that for so long as the contravention continues.
  6. The section extends the above provisions to any overseas company required to register particulars under the Companies Act 2006.

Section 18: Direction to change name wrongly registered

  1. This section inserts section 76B into the Companies Act 2006, which allows the Secretary of State to direct a name change where it appears to the Secretary of State that a company’s name infringes any provision of Part 5 of the Companies Act 2006 , or where the Secretary of State would have had grounds to issue such a direction had the new name prohibitions introduced by this Act been in place when the name was first registered.
  2. Specifically, it allows the Secretary of State in such circumstances to issue a written direction giving a company a (potentially extendable) period of at least 28 days to change its name. Once a direction has been issued the Registrar can remove from the public register any reference to the name which is the subject of the direction.
  3. Within the first three weeks of the 28-day compliance period (however extended) the company can apply to the court for the direction to be quashed. Where the court agrees that a change of name is indeed appropriate it will decide the timescale for complying with the direction and the company will not have to comply before the court has reached its decision.
  4. Failure to comply with a direction is an offence on the part of the company and all officers in default including shadow directors and attracts, on summary conviction, a fine of up to level 3 on the standard scale as well as a daily default of up to one-tenth of that for so long as the contravention continues.
  5. Section 18(3) extends the above provisions to any overseas company required to register particulars under the Companies Act 2006 by amending section 1047.

Section 19: Registrar’s power to change names containing computer code

  1. Section 19 amends the heading of Chapter 5 of Part 5 of the Companies Act 2006. It also inserts section 76C into the Companies Act 2006, which gives powers to the Registrar so that she can act where companies, already on the register, have a name which contains computer code. The powers allow the Registrar to determine a new name for the company and remove from the register any reference to the company’s old name. Where the Registrar has exercised the powers, the Registrar must notify the company and annotate the register accordingly.
  2. While an earlier section in the Act allows for the prevention of names involving computer code being incorporated onto the register, this section allows for their removal where they are detected in relation to companies already incorporated on the register.

Section 20: Registrar’s power to change company’s name for breach of direction

  1. Section 20 inserts section 76D into the Companies Act 2006. Where a company fails to change its name having been directed under provisions already present in the Companies Act 2006 or under the new provisions included in this Act, the Registrar is empowered by section 76D to change the company’s name. The Registrar must inform the company and annotate the register accordingly.

Section 21: Sections 19 and 20: consequential amendments

  1. Following on from the Act’s introduction of new Registrar powers to change a company name in circumstances where it contains computer code or has been the subject of a breached name change direction, this section makes consequential amendments requiring the replacement of the old name with the new on the register. It applies the same principle in the case of overseas companies on the register.

Section 22: Company names: exceptions based on national security etc

  1. This section adds new section 76E to Part 4 of the Companies Act 2006 which is concerned with company names. The purpose of section 76E is to disapply various prohibitions and restrictions on the use of certain words and expressions in a company’s name provided under Part 5 and related regulations. Such exemptions will only be permitted where the Secretary of State is satisfied there is a case for them on grounds of national security or to prevent or detect serious crime. Serious crime is that which constitutes a criminal offence in the UK (or would do so if committed in the UK) either carrying a prison sentence of three years or more or involving violence, substantial financial gain or the concerted action of a substantial group of people with a common purpose.

Business names

Section 23: Use of name suggesting connection with foreign governments etc

  1. Section 1193 of the Companies Act 2006 already makes it unlawful, without the Secretary of State’s consent, to carry on business in the UK under a name which implies a connection with the UK Government, devolved administrations and local authorities in the UK and other public bodies specified by regulation. This section inserts section 1196A into the Companies Act 2006, which extends that principle by making it an offence to carry out business in the UK under a name which suggests a connection, where none exists, with a foreign government or its offshoots or with international bodies, for example, the United Nations or NATO. The offence, whether committed by an individual or a body corporate carries a fine of up to level 3 on the standard scale as well as a daily default of up to one-tenth of that for so long as the contravention continues.

Section 24: Use of name giving misleading indication of activities

  1. In the context of a name under which business is conducted, this section amends section 1198 of the Companies Act 2006, redefining what constitutes a misleading indication of activities. In effect, it relaxes the test by lowering the necessary risk of harm to the public and makes it clear that such harm can potentially manifest outside the UK.

Section 25: Use of name that a company has been required to change

  1. This section inserts section 1198A into the Companies Act 2006, which provides that where a company has been directed to change its name or ordered to do so by the names change adjudicator it must not carry on business in the UK under that name after the period for compliance has expired. Exceptions are where approval has been granted by the Secretary of State or where the direction or order predate the coming into force of this section. Contravention of this section is an offence on the part of the company and all officers in default and attracts, on summary conviction, a fine of up to level 3 on the standard scale as well as a daily default of up to one-tenth of that for so long as the contravention continues.

Section 26: Use of a name that another company has been required to change

  1. This section inserts section 1198B into the Companies Act 2006, which provides that where a company has been directed to change its name or ordered to do so by the names change adjudicator (and the period for compliance has expired) no other company should carry on business in the UK under that name if an acting or former officer or shareholder of the initial company has similar involvement in the new company. Exceptions are where the second company is registered under the Companies Act 2006 by the name or where the direction or order predate the coming into force of this section. Contravention of this section is an offence on the part of the company and all officers in default and attracts, on summary conviction, a fine of up to level 3 on the standard scale as well as a daily default of up to one-tenth of that for so long as the contravention continues.

Section 27: Use of names: exceptions based on national security etc.

  1. This section adds new section 1199A to Part 41 of the Companies Act 2006. The purpose of section 1199A is to disapply various prohibitions and restrictions on the use of certain words and expressions in a business name provided under Part 41 and related regulations. Such exemptions will only be permitted where the Secretary of State is satisfied there is a case for them on grounds of national security or to prevent or detect serious crime. Serious crime is that which constitutes a criminal offence in the UK (or would do so if committed in the UK) either carrying a prison sentence of three years or more or involving violence, substantial financial gain or the concerted action of a substantial group of people with a common aim.

Registered offices

Section 28: Registered office: appropriate addresses

  1. This section amends the Companies Act 2006 to introduce a requirement for a company’s registered office to be at an ‘appropriate address’. Subsection (2) inserts at the end of section 9(5)(a) of the Companies Act 2006, the words "which must be at an appropriate address within the meaning given by section 86(2)".
  2. Section 28(3) substitutes section 86 of the Companies Act 2006. The new section 86 sets out that at all times a company must ensure that its registered office is at an appropriate address (subsection (1)). An "appropriate address" means an address where, in the ordinary course of events, a document addressed to the company, and delivered there by hand or by post, would be expected to come to the attention of a person acting on behalf of the company, and the delivery of documents is capable of being recorded by the obtaining of an acknowledgement of delivery (subsection (2)).
  3. Subsection (3) of the new section 86 sets out that it is an offence if a company fails, without reasonable excuse, to comply with the requirement to have its registered office at an appropriate address. An offence is committed by (a) the company and (b) every officer of the company who is in default. Subsection (4) of the new section 86 sets out that if a person is guilty of an offence under this section, the penalty (on summary conviction) will be: (a) in England and Wales, a fine; (b) in Scotland or Northern Ireland a fine not exceeding level 5 on the daily scale, and, where there is a continued contravention, a daily default fine not exceeding one-tenth of level 5 on the standard scale.
  4. Subsection (5) of the new section 86 provides that subsection (1) does not apply when the company’s registered office address is the default address nominated by virtue of section 1097A(3)(b).
  5. Section 28(4) amends section 87 of the Companies Act 2006 (change of registered office address) to insert that there is a new requirement, when notifying the Registrar of a change of address, to make a statement that the new address is an appropriate address within the meaning of new section 86(2).
  6. Section 28(5) and (6) make changes to section 853 of the Companies Act 2006. Section 29(5) removes paragraph (a) from section 853B (duties to notify a relevant event). Paragraph (a) sets out the requirement to give notice to the Registrar of a change in registered office address.
  7. Section 28(6) inserts a new section 853CA (Duty to notify a change in registered office) after section 853C of the Companies Act 2006. The new section applies where a company makes a confirmation statement, and at the time of making the statement, the registered office is not at an appropriate address as defined by new section 86(2) (subsection (1)). Subsection (2) sets out that where this is the case, the company must deliver a notice under section 87 of the Companies Act 2006 (change of registered office) at the same time as it delivers the confirmation statement.

Registered email addresses

Section 29: Registered email addresses etc

  1. This section amends the Companies Act 2006 by amending section 9 (registration document), section 16 (effect of registration), the heading of Part 6, and inserting new section 88A. The effect is to stipulate that all companies must maintain an appropriate email address. An appropriate email address is one at which, in the ordinary course of events, emails sent to it by the Registrar would be expected to come to the attention of a person acting on behalf of the company. Failure to maintain an appropriate email address, without reasonable excuse, will be an offence and the company will be subject to a criminal penalty. Section 29 also inserts new section 88B which provides for how a company may change its registered email address.
  2. This will allow the Registrar to communicate with the company electronically, for example, to provide updates, notices and reminders that are important for companies.
  3. Section 29(6) also inserts new section 853CB, which provides that if a company’s registered email address is not an appropriate email address and the company has not given a notice under section 88B, the company must give notice to the Registrar of the change in the email address at the time it delivers its confirmation statement.
  4. Section 29(7) secures that the registered email address will not made available for public inspection.
  5. Section 29(9) inserts a new Part 2A into Schedule 4 to the Companies Act 2006, which prescribes when a document or information is validly sent or supplied electronically to a company by the Registrar or the Secretary of State.

Section 30: Registered email addresses: transitional provision

  1. This section requires existing companies on the register before section 29(2) comes into force to deliver to the Registrar a statement specifying their registered email addresses at the same time as they company delivers a confirmation statement with a confirmation date that is after the day on which section 29(2) comes into force.

Disqualification in relation to companies

Section 31: Disqualification for persistent breaches of companies legislation: GB

  1. This section amends section 3 (disqualification for persistent breaches of companies legislation) of the Company Directors Disqualification Act 1986 ("CDDA 1986") to allow for the disqualification of directors in Great Britain on the grounds of "persistent breaches" of "relevant provisions of the companies legislation". A person may be disqualified if in preceding 5 years he has been adjudged guilty of three or more "defaults".
  2. Section 31(4) amends section 3 of the CDDA 1986 so that the imposition of a financial penalty can also count as a "default", whether imposed under section 1132A of the Companies Act 2006 or under section 39 of the Economic Crime (Transparency and Enforcement Act) 2022.
  3. The "relevant provisions of the companies legislation" relate to non-compliance with filing obligations and directors’ and People with Significant Control’s identity verification requirements as set out in section 31(5). Currently only the conviction of an offence can lead to disqualification.
  4. The meaning of "the companies legislation" is amended by section 29(6) to include the Companies Acts, Parts A1 to 7 of the Insolvency Act 1986 (company insolvency and winding up), and Part 1 of the Economic Crime (Transparency and Enforcement) Act 2022 (registration of overseas entities). This ensures any offence committed under "the companies legislation" can count as a "default".

Section 32: Disqualification for persistent breaches of companies legislation: NI

  1. This section amends article 6 (disqualification for persistent default of companies legislation) of the Company Directors Disqualification (Northern Ireland) Order 2002 ("CDDNIO 2002"), to allow for disqualification of directors in Northern Ireland on the grounds of persistent non-compliance with "relevant provisions of the companies legislation". A person may be disqualified if in preceding 5 years he has been adjudged guilty of three or more "defaults".
  2. Section 29(2)(c) amends article 6 of the CDDNIO 2002 so that the imposition of a financial penalty can also count as a "default", whether imposed under section 1132A of the Companies Act 2006 or under section 39 of the Economic Crime (Transparency and Enforcement Act) 2022.
  3. Section 29(2)(d) sets out "the relevant provisions of the companies legislation" relates to non-compliance with companies filing obligations and directors’ and People with Significant Control’s identity verification requirements.
  4. The meaning of "the companies legislation" is amended by Section 29(2)(e) to include the Companies Acts, Parts A1 to 7 of the Insolvency Act 1986 (company insolvency and winding up), and Part 1 of the Economic Crime (Transparency and Enforcement) Act 2022 (registration of overseas entities). This ensures any offence committed under "the companies legislation" can count as a "default".

Section 33: Disqualification on summary conviction: GB

  1. This section amends section 5 of the Company Directors Disqualification Act 1986 ("CDDA 1986") (disqualification on summary conviction), to allow for the disqualification of directors in Great Britain that have been convicted (either on indictment or summary conviction) of failing to comply with "relevant provisions of the companies legislation" as set out in section 31.
  2. Section 33(3) of this section substitutes subsection (3) of section 5 of the CDDA 1986 so that for a person to be disqualified under section 5, during the 5 years ending with the date of the conviction, there must have been no fewer than 3 relevant findings of guilt in relation to the person. Section 33(3) also inserts new subsection (3A) which sets out what the relevant findings of guilt in relation to a person can be.

Section 34: Disqualification on summary conviction: NI

  1. This section amends article 8 (disqualification on summary conviction of offence) of the Company Directors Disqualification (Northern Ireland) Order 2002 ("CDDNIO 2002"). This allows for disqualification of directors in Northern Ireland that have been convicted (either on indictment or summary conviction) of failing to comply with "relevant provisions of the companies legislation" as set out in section 32.
  2. Section 34(3) of this section substitutes subsection (3) of article 8 of the CDDNIO 2002 so that for a person to be disqualified under article 8, during the 5 years ending with the date of the conviction, there must have been no fewer than 3 relevant findings of guilt in relation to the person. Section 34(3) also inserts new subsection (3A) which sets out what the relevant findings of guilt in relation to a person can be.

Section 35: Power to impose director disqualification sanctions

  1. This section amends the Sanctions and Anti-Money Laundering Act 2018 ("SAMLA 2018") by amendments to section 1, 9 and 15 and insertion of a new section 3A of the SAMLA 2018. The provisions inserted and amended by this section allow for creation of a new type of sanctions measure by regulations under the SAMLA 2018.
  2. The new section 3A of the SAMLA 2018 allows an appropriate Minister to make regulations and designate a person as subject to "director disqualification sanctions" for the purposes of section 11A of the Company Directors Disqualification Act 1986 and Article 15A of the Company Directors Disqualification (Northern Ireland) Order 2002. A designated person will always be subject to both of these provisions, which will effectively prohibit them from acting as a director of any company registered in the UK. As a result of such designation, a person acting as a director of a company or directly or indirectly taking part in or being concerned in the promotion, formation or management of a company will commit an offence.
  3. Amendments to section 15 of the SAMLA 2018 allow for creation of exceptions and issuance of licences to authorise a designated person to do anything otherwise prohibited under the director disqualification sanctions. A designated person subject to a licence will not commit an offence if they acted under an authority of a licence.

Section 36: Disqualification of persons designated under sanctions legislation: GB

  1. This section inserts a new section 11A into the Company Directors Disqualification Act 1986 ("CDDA 1986") and amends sections 13, 14, 15, 18 and 21 of CDDA 1986.
  2. Section 11A provides that any person who is subject to director disqualification sanctions commits an offence if they act as a director or take part in or are concerned in the promotion, formation or management of a company, either directly or indirectly, unless they have been issued with a licence or unless an exception under the Sanctions and Anti-Money Laundering Act 2018 applies. This offence is committed in Great Britain by any "person who is subject to director disqualification sanctions" as defined in section 11(4) of the CDDA 1986. This applies to anyone designated in accordance with regulations made under the Sanctions and Anti-Money Laundering Act 2018 as a person subject to sanctions for the purposes of section 11A of CDDA as well as Article 15A of the Company Directors Disqualification (Northern Ireland) Order 2002. A person guilty of an offence under section 11A will be subject to the criminal penalties under section 13 CDDA 1986. An equivalent offence effective in Northern Ireland is provided in section 38.
  3. Section 36 also changes section 15 of the CDDA 1986, by making (i) a designated person acting in contravention of the disqualified director sanctions, as well as (ii) persons acting on their instructions, personally liable for relevant company’s debts. Changes to section 15 of the CDDA 1986 also clarify, that (i) a designated person, who did not know or could not reasonably have been expected to know they were subject to director disqualification sanctions, as well as (ii) a person who acted on instructions that they reasonably believed were authorised, is not responsible for relevant debts incurred in this period. The term "authorised" is defined in section 15(8) for the purpose of this section.
  4. This section also amends section 14 of the CDDA 1986 by extending the criminal liability for offences committed by body corporates subject to director disqualification sanction to the officers of the body corporate.
  5. Lastly this section amends section 18 of the CDDA 1986 by requiring the Secretary of State to publish information about persons who are subject to director disqualification sanctions, including any licences issued to them, on the register of disqualification orders and undertakings.

Section 37: Section 36: application to other bodies

  1. Section 37 amends sections 22A, 22B, 22C, 22E, 22F, 22G and 22H of the Company Directors Disqualification Act 1986 ("CDDA 1986"). It disapplies the prohibition in the new section 11A of the CDDA 1986 in relation to building societies, incorporated friendly societies, NHS foundation trusts, registered societies, charitable incorporated organisations, further education bodies and protected cell companies. This has effect in England and Wales and Scotland.
  2. The Secretary of State may by regulations repeal any of the preceding subsections in this section.

Section 38: Disqualification of persons designated under sanctions legislation: NI

  1. This section inserts new Article 15 to the Company Directors Disqualification (Northern Ireland) Order 2002 ("CDDNIO 2002"), as well as amends Articles 18, 19 and 22 of the CDD(NI)O 2002.
  2. Article 15A of the CDDNIO 2002 provides that any person subject to director disqualification sanctions commits an offence if they act as a director or take part in or be concerned in the promotion, formation or management of a company, either directly or indirectly, unless they have been issued with a licence or unless an exception applies. This offence is committed in Northern Ireland by any "person who is subject to director disqualification sanctions" as defined in Article 15A(4) of the CDDNIO 2002. This applies to anyone designated in accordance with regulations made under the Sanctions and Anit-Money Laundering Act 2018 as a person subject to sanctions for the purposes of section 11A of the Company Directors Disqualification Act 1986 as well as Article 15A of the CDDNIO 2002. A person guilty of an offence under Article 15A will be subject to the criminal penalties under Article 18 CDD(NI)O 2002. An equivalent offence effective in Great Britain is provided in section 36.
  3. Section 38 also changes Article 19 of the CDDNIO 2002, by making (i) a designated person acting in contravention of the disqualified director sanctions, as well as (ii) persons acting on their instructions, personally liable for the relevant company’s debts. Changes to Article 19 of the CDDNIO 2002 also clarify, that (i) a designated person, who did not know or could not reasonably have been expected to know they were subject to director disqualification sanctions, as well as (ii) a person who acted on instructions that they reasonably believed were authorised, is not responsible for relevant debts incurred in this period. The term "authorised" is defined in section 15(8) for the purpose of this section.
  4. Lastly this section amends Article 22 of the CDDNIO 2002 by requiring the Northern Ireland Department to publish information about persons who are subject to director disqualification sanctions, including any licences issued to them, on the register of disqualification orders and undertakings.

Section 39: Section 38: application to other bodies

  1. Section 39 amends Articles 24D, 25, 25A, 25B and 25C of the Company Directors Disqualification (Northern Ireland) Order 2002. It disapplies the prohibition in the new Article 15A in relation to building societies, incorporated friendly societies, registered societies, credit unions and protected cell companies.
  2. The Secretary of State may by regulations repeal any of the preceding subsections in this section.

Directors

Section 40: Disqualified directors

  1. This section inserts sections 159A and 169A into the Companies Act 2006.
  2. Section 159A(1) sets out that disqualified directors may not be appointed as directors of a company. If they are appointed in contravention of section 159A, under subsection (3) their appointment is void.
  3. Section 159A(2) defines "disqualified under the directors disqualification legislation", and distinguishes it depending on whether a company is registered by, or a document is delivered to, the Registrar in Great Britain or in Northern Ireland. The grounds for disqualification relevant for this definition are listed in Part 1 and Part 2 of the table in subsection (2). The definition of a disqualified person includes persons disqualified under the Company Directors Disqualification Act 1986 and the Company Directors Disqualification (Northern Ireland) Order 2002. It concerns not only persons subject to disqualification orders and undertakings, but also: undischarged bankrupts, persons subject to bankruptcy restrictions order or undertakings, debt relief restrictions orders or undertakings and moratoriums under the debt relief orders, as well as persons subject to director disqualification sanctions under the SAMLA 2018. The table also sets out that persons are not disqualified directors under directors disqualification legislation if they have the relevant permission of a court to act or they act under the authority of a licence or an exception under the Sanctions and Anti-Money Laundering Act 2018.
  4. Section 159A(4) provides that this prohibition on appointment of a disqualified director does not provide protection from criminal prosecution or civil liability, if he or she were to act as director, or if the company’s directors usually act on the disqualified director’s instructions. This is so third parties and anyone who has relied on the actions of an invalidly appointed director are not unfairly disadvantaged.
  5. Section 169A(1) sets out that a person who becomes disqualified ceases to hold the office of a director and their directorship becomes void.
  6. Section 169A(2) sets out that a person who ceases to hold the office of director under this section remains liable for his actions if he continues to act as a director. This includes acting as a de-facto director. The voiding of the directorship under section 169A (1) does not provide protection from criminal prosecution or civil liability, if the individual continues to act as director, or if the company’s directors usually act on the disqualified director’s instructions. This is so third parties and anyone who has relied on the actions of a disqualified director are not unfairly disadvantaged.
  7. Section 169A(3) sets out that any person who became disqualified before section 169A came into force, should be treated under section 169A(1) as if they became disqualified on the day section 169A came into force.

Section 41: Section 40: amendments to clarify existing corresponding provisions

  1. This section amends section 156C of the Companies Act 2006 as inserted by the Small Business, Enterprise and Employment Act 2015, a provision establishing transitional arrangements for changes introduced by section 156A and 156B around appointment of directors who are not natural persons. This amendment clarifies that the void appointment results in removal from office by virtue of this appointment, not ceasing to be a director at all. A director, whose appointment became void, cannot be treated as a de jure director, but normal principles as to de facto directors apply to such persons. Consequently both de facto and shadow directors remain liable for contraventions of any Companies Acts or other enactments notwithstanding that they will cease to hold office by virtue of the void appointment.
  2. The section also amends section 158 in respect of circumstances where an individual has been appointed as a director pursuant to regulations exempting them from the minimum age requirement (of 16 years) for a company director and where the terms of that exemption are no longer met.
  3. Finally, the section repeals section 159 of the Companies Act 2006 which no longer serves a purpose.

Section 42: Repeal of power to require additional statements

  1. This section repeals section 1189 (power to require additional statements in connection with disqualified persons becoming director or secretary) of the Companies Act 2006. This power is no longer required because this Act introduces a requirement to provide statements about disqualification and permissions to act in sections 12, 12A, 167G and 790LA of the Companies Act 2006.

Section 43: Prohibition on director acting unless ID verified

  1. This section inserts new section 167M into the Companies Act 2006.
  2. Subsection (1) sets out that an individual must not act as a director unless they have verified their identity. In practice it means that until they verify their identity, they should not take any actions on behalf of the company in their capacity as a director. If they fail to verify their identity and continue acting as a director, they are committing an offence under subsection (3) for which they would be liable to a fine if found guilty.
  3. Subsection (2) sets out that a company must ensure that its directors do not act as directors unless they are verified. To avoid liability under this subsection, a company can either appoint a verified individual or remove an unverified director from office. Subsection (4) creates an offence on the company and every officer of the company who is in default (including its shadow directors) if they fail to ensure individuals do not act as directors unless verified. A person found guilty is liable to a fine.
  4. Under subsection (6) the only result of a director’s breach of section 167M(1) and a company’s breach of section 167M(2) is commission of offences provided respectively in subsection (3) and (4). Despite the commission of these offences, any action taken by the director is valid.

Section 44: Prohibition on acting unless directorship notified

  1. This section inserts section 167N into the Companies Act 2006. Section 167N creates an offence for an individual to act as a director, unless their directorship is notified to the Registrar. The company must communicate this to the Registrar within 14 days of this individual becoming a director by delivering a notice under section 167G (Duty to notify Registrar of change in directors). The notice must include a statement that the director’s identity is verified. The section 167N offence will only apply, if a notice under section 167G was not given on time. The director can legally act as long as the company notifies the Registrar of their appointment within the 14 day deadline.
  2. Under subsection (5) a person found guilty of the offence under this section is subject to a fine.
  3. The purpose of this obligation and offence in addition to directors having to verify their identity is to ensure that all directors are included on the companies register. Whilst the obligation to notify directors’ appointments is placed under section 167G on a company, placing an additional obligation on directors not to act until notified increases the motivation of both parties to comply.
  4. Subsection (4) creates a defence for directors, who can prove they reasonably believed the company had given notice of their appointment to the Registrar.
  5. Under subsection (7) the only result of a director’s breach of section 167N(1) is commission of offence in subsections (3) and (4). Despite the commission of these offences, any action taken by the director is valid.

Section 45: Registrar’s power to change a director’s service address

  1. Existing section 246 of the Companies Act 2006 sets out the steps that both the Registrar and a relevant company must take when a director’s residential address has been entered on the public record in substitution for an ineffective service address pursuant to a decision of the Registrar under section 245 of the Act.
  2. Section 45 replaces section 246 to reflect the new circumstances that arise upon the Act’s abolition of local registers of directors. It effectively preserves the existing Registrar obligations in respect of giving appropriate notice of the action that has been taken, while omitting existing obligations upon the company to reflect the change of service address in its local register. It also provides that an address other than a director’s residential address may be entered onto the public register if so determined pursuant to regulations made under section 1097B of the Companies Act as introduced by section 106 of this Act.

Register of members

Section 46: Register of members: information to be included and powers to obtain it

  1. Section 46 amends various provisions of Part 8 of the Companies Act 2006 ("2006 Act") to enhance member information and more closely align the provisions with those relating to the People with Significant Control of UK companies.
  2. Section 46(2) amends section 112 of the 2006 Act, to provide that where an individual’s name is entered in a company’s register of members that is not in the form required by new section 113A, that does not affect the person becoming a member. For example, if a nickname or shortened version of their name were entered as their forename, there were a typographical error in the spelling of their name, or there were an inversion of their forename and surname. There may be cases where a company has not been able to obtain a member’s forename and surname by the time of commencement – this makes it clear the person is still a member, though the company and member are non-compliant with the requirements.
  3. Section 46(3) amends the relevant Chapter heading.
  4. Section 46(4) restates the requirements of section 113(2-3) and (5-6) of the 2006 Act, but refers to the required information as per new sections 113A and 113B.
  5. Section 46(4) also inserts new subsection (6A) to section 113 of the 2006 Act. This requires "non-traded companies" to retain old information about a member where it changes, the date the information changed and the date of entry, in their register of members. New section 113E provides a member with two months to notify a company of the change, so it is possible the date of entry and date of change may be different dates. These requirements apply from the date of commencement only – it does not require companies to obtain or retain any historic information about its members prior to commencement of the provision. This clarifies a legal uncertainty in the current drafting of section 113 when read with sections 121 and 125. The old information must be retained until its removal is authorized by either section 121, or by court order under section 125, of the 2006 Act. A power for the Secretary of State to make regulations is also provided, so that traded companies could be brought into the scope of the requirements if it were later deemed proportionate.
  6. Section 46(4) also amends the offence in section 113 of the 2006 Act so that a company only commits an offence if it doesn’t have a reasonable excuse for the failure to comply with the requirements. This aligns the drafting of the offence with other offences in the 2023 Act. There is no statutory definition of "reasonable excuse" and this phrase must be given its ordinary meaning. Each case will be considered on its individual facts. A company should do what it can reasonably be expected to do to maintain an up-to-date register, including by using its new power under section 113F of the Companies Act 2006.
  7. In the 2006 Act and associated regulations there is no definition of "name" for a member of a company, such that an individual member could state their name is J Bloggs. There is also currently no distinction made between members who are individuals and members who are body corporates or firms that are legal persons under the law by which they are governed.
  8. Section 46(5) section makes that distinction by inserting new sections 113A and 113B into the 2006 Act, which separates the requirements. The required information remains the same for both types of member – name and service address. In relation to a member who is an individual, "name" is defined as forename and surname, and in the case of a peer or individual usually known as a title, that title. This has the effect of requiring an individual to register their name as Joe Bloggs instead of J Bloggs which provides more transparency as to who an individual member is.
  9. Section 46(5) also inserts new section 113C into the 2006 Act which provides a power for the Secretary of State to make regulations, including to change the required information about a member.
  10. Section 46(5) also inserts new sections 113D and 113E into the 2006 Act which provide new duties for members to provide and keep their information up to date. New section 113D requires a member to provide the company with required information within two months of becoming a member, unless it has already been provided or it was contained in the application for the registration of the company. A member may need to provide information to the company for a variety of reasons, for example, if the earlier provided information was inaccurate or entered incorrectly by the company into the register of members.
  11. Section 46(5) also inserts new section 113F into the 2006 Act provides a new power for companies to send a notice to require members to provide or update information within one month. This will help companies ensure the information required to be included in its register of members is included. It is a discretionary power which may be used, for example, if a company believes the information is not up to date. This section does not require a company to validate or verify the information provided in response to a notice.
  12. Section 46(5) also inserts new section 113G into the 2006 Act which provides new offences for the failure by a person, without a reasonable excuse, to comply with new sections 113D-F. Where an offence is committed by a firm, it is also committed by every officer of the firm who is in default.
  13. Section 46(5) also inserts new section 113I and 113J into the 2006 Act, which provide new offences for the provision of a statement that is misleading, false, or deceptive in a material particular in purported compliance with new sections 113D-113F. New section 113I provides a "basic" offence, where a person commits an offence unless they have a reasonable excuse for doing so and new section 113J provides an "aggravated" offence, where a person does so knowingly, with sanctions that are commensurate with the seriousness of the misconduct. There is no statutory definition of "reasonable excuse" and this phrase must be given its ordinary meaning. Each case will be considered on its individual facts.
  14. Section 46(6-10) make consequential amendments to sections 114, 115, 121 and 123.
  15. Section 46(11) amends section 771 (procedure on transfer being lodged) so that a company can refuse to transfer shares unless satisfied it has the information that is required to enter in its register of members in relation to the transferee, i.e. the new member.

Section 47: Additional ground for rectifying the register of members

  1. This section replaces section 125(1) of the Companies Act 2006 (power of court to rectify the register). Without the amendment, the court may only order the rectification of the register in relation to names; Section 47 broadens the rectification power so it is available in respect of any information on the members register.
  2. This means if a company’s register of members a) does not include information that it is required to include, or b) includes information that it is not required to include, then the person aggrieved, or any member of the company, or the company, may apply to the court for rectification of the register.

Section 48: Register of members: protecting information

  1. This section inserts new section 120A (Power to make regulations protecting material) into the Companies Act 2006. New section 120A allows the Secretary of State to make regulations:
    1. To require a company to refrain from using or disclosing "individual membership information" except in specified circumstances. This could be used if new information about members were required under section 113C, which would not normally be made available for public inspection, for example an individual’s usual residential address.
    2. To confer power on the Registrar to make an order requiring a company to refrain from using or disclosing "individual membership information" except in specified circumstances, where an application to the Registrar is made to request this. The Registrar may receive an application if a member who is an individual was at serious risk of violence or intimidation from their information being made available for public inspection, alongside an application under new section 1088 of the 2006 Act.
  2. Section 48(2) - (4) amend sections 114-116 (which are provisions that require information to be made available for public inspection) to be subject to any regulations under new section 120A (Power to make regulations protecting material).
  3. Section 48(5) inserts new subsection (2A) to section 120 (rights to inspect and require copies). This states subsections (1) and (2) do not apply to an alteration that relates to information that the company is required to refrain from disclosing by virtue of regulations under new section 120A (protected material).
  4. Section 48(6) inserts new section 120B (Offence of failing to comply with regulations under section 120A). This states if a company fails to comply with a restriction on the use or disclosure of information imposed by virtue of regulations under section 120A, an offence is committed by the company and every officer of the company who is in default. Subsection (2) states a person guilty of an offence on summary conviction in England and Wales is liable to a fine, and in Scotland or Northern Ireland, to a fine not exceeding level 5 on the standard scale and, for continued contravention, a daily default fine not exceeding one-tenth of level 5 on the standard scale.
  5. Section 48(7) inserts new paragraph (aa) into section 1087(1) (material not available for public inspection). This means any application or other document delivered to the Registrar under regulations under new section 120A (protection of individual membership information) are not to be made available for public inspection.

Section 49: Register of members: removal of option to use central register

  1. This section amends the Companies Act 2006 to remove the option for private (non-traded) companies to elect to keep information about their members on the "central register" maintained by the Registrar. The effect is to require companies to maintain their own register of members.
  2. Section 49(3) inserts new section "128ZA: Transitional provision where information kept on central register". This requires private companies who previously chose to only keep information on the central register to enter in its register of members all of the information that would have been required if the election had never been made.
  3. This section makes various consequential amendments to other sections of the Companies Act 2006.

Section 50: Membership information: one-off statement

  1. Companies are required to file a confirmation statement at least once a year, where they update the Registrar with any changes to information, or they confirm the existing information on the register is still up to date.
  2. This section requires a company to provide information to the Registrar via a one-off statement containing ‘relevant membership information’, alongside the company’s usual confirmation statement. The "relevant membership information" means:
    1. In relation a traded company: the name and address (as they appear in the company’s register of members) of each person who, at the end of the confirmation date, held at least 5% of the issued shares of any class of the company and the number of shares of each class held by each such person at the time.
    2. In relation to a non-traded company: the name (as it appears in the company’s register of members) of every person who was a member of the company at the end of the confirmation date, and the number of shares of each class held at the end of the confirmation date by each person who was a member of the company at that time.
  3. The one-off confirmation statement must be provided at the same time as the next confirmation statement that is due following the "appointed day". The appointed day will be set in regulations made by the Secretary of State and will allow enough time for companies to obtain the information needed from their members if they do not already hold it.
  4. This section does not apply to a company limited by guarantee or an unlimited company, as defined by section 3 of the Companies Act 2006.

Registration of directors, secretaries and persons with significant control

Section 51: Abolition of local registers etc

  1. This section amends the Companies Act 2006, with the amendments to be made being set out in Schedule 2 to the Act. The purpose of these amendments is to abolish companies’ requirements to maintain locally the following registers: register of directors, register of directors’ residential addresses, register of secretaries, and register of People with Significant Control (also known as the PSC Register).

Section 52: Protection of date of birth information

  1. This section amends sections 1087, 1087A and 1087B of the Companies Act 2006.
  2. Section 52 (2) provides that "relevant date of birth information" as defined by new section 1087A(3) is not to be made available for public inspection.
  3. Section 52 (3) substitutes s1087A (Information about a person's date of birth) and s1087B (Disclosure of DOB information) with new sections 1087A (Protection of date of birth information), 1087B (Protection of date of birth information in old documents) and 1087C (Disclosure of date of birth information).
  4. Section 1087A is amended because of the removal of a company’s own register of directors and register of People with Significant Control, and the ability to "elect" to hold these registers exclusively on the register kept by the Registrar.
  5. New section 1087B(1) limits the extent to which the new section 1087A applies in relation to documents delivered to the Registrar before that section comes into force. New section 1087B(2) – (4) details scenarios where new section 1087A does not apply.
  6. New section 1087C(1) states the scenarios where the Registrar must not disclose relevant date of birth information. New section 1087C(3) states the Registrar may disclose relevant date of birth information to a credit reference agency (as defined by section 243(7)). New section 1087C(4) states section 243(3) - (8) (permitted disclosure of directors’ residential addresses etc. by the Registrar) apply for the purposes of subsection (3).

Accounts and reports

Section 53: Filing obligations of micro-entities

  1. This section inserts new section 443A into the Companies Act 2006, which provides for the specific filing obligations for micro-entities. The effect is that micro-entities are required to file a balance sheet, a profit and loss and may choose to file a directors’ report.

Section 54: Filing obligations of small companies other than micro-entities

  1. This section replaces section 444 in the Companies Act 2006 and sets out the filing requirements for small companies as the requirements for micro entities have been stripped from section 444 and are now set out at section 443A. The filing requirements for small companies that do not meet the micro-entity threshold in section 384A now require small companies to file annual accounts and a directors’ report.

Section 55: Sections 53 and 54: consequential amendments

  1. These amendments are consequential and ensure that new sections 53 and 54 function as intended.
  2. Section 55(2) amends section 415A(2) of the Companies Act 2006, removing the exemption for small companies in relation to filing a Director’s Report for sections 444 to 446.
  3. Section 55(3) amends section 441(1) by including new section 443A in the list of relevant sections, removing the reference to section 444A from the same list, and changing the wording in relation to section 444 to reflect the new structure of the filing obligation sections.
  4. Section 55(4) omits section 444A from the Companies Act 2006. Section 444A previously set out the filing obligations of companies entitled to small companies exemption in relation to the directors’ report.
  5. Section 55(5) and (6) update references in sections 445 and 446 to the relevant filing obligation sections for micro-entities and small companies other than micro-entities, by including references to section 443A and removing references to section 444A. Subsection (7) omits the reference to section 444 in section 473 of the Companies Act 2006, which relates to the parliamentary procedure applicable for regulations made.

Section 56: Use or disclosure of profit and loss accounts for certain companies

  1. This section allows the Secretary of State to make regulations requiring the Registrar not to disclose profit and loss accounts for micro entities and other small companies. The regulations might cover all such accounts or only accounts relating to certain descriptions of company (see section 1292 to the Companies Act 2006).

Section 57: Statements about exemption from audit requirements

  1. This section amends section 475(2) of the Companies Act 2006. It adds a requirement for directors to make a statement when claiming an audit exemption, to confirm that the company qualifies for the exemption.

Section 58: Removal of option to abridge Companies Act accounts

  1. This section amends Schedule 1 to the Small Companies and Groups (Accounts and Directors’ Report) Regulations 2008 (S.I. 2008/409) (Companies Act 2006 individual accounts). It removes the option for small companies to prepare and file abridged accounts.

Confirmation statements

Section 59: Confirmation statements

  1. This section restates and supplements the Companies Act 2006 provisions which prescribe a company’s duties to notify certain events and provide certain pieces of information in advance of, or at the same time as, delivery of its annual confirmation statement. It adds to existing requirements new duties arising from certain provisions in the Act, namely those annually to confirm the "lawful purpose" of the company and, in the case of a company’s first confirmation statement, relevant changes occurring in the period after it has submitted its application for incorporation but prior to its incorporation by the Registrar.

Section 60: Duty to confirm lawful purposes

  1. This section inserts section 853BA into the Companies Act 2006. It requires the company, once formed, to reassert in its annual confirmation statement that the intended future activities of the company are lawful.

Section 61: Duty to notify a change in company’s principal business activities

  1. This section inserts paragraph (1A) into section 853C of the Companies Act 2006. This expands upon the existing duty of a company to notify a change in its principal business activities to provide that, if such a change takes place in the period between its application for incorporation and its actual incorporation date, it must be reported in its first confirmation statement.

Section 62: Duty to deliver information about exemption from Part 21A

  1. Certain companies are exempt from Part 21A of the Companies Act 2006 (information about persons with significant control) because they are already subject to equivalent disclosure and transparency rules conforming to international standards. A company that is exempt currently has to confirm that it is exempt in each confirmation statement. This section requires it to explain why it is exempt– by specifying whether the company:
    1. falls within the description specified in section 790B(1)(a) or a description specified in regulations under section 790B(1)(b), and
    2. if it falls within a description specified in regulations under section 790B(1)(b), what that description is.
  2. The description specified in section 790B(1)(a) is that it has voting shares admitted to trading on a UK or EU regulated market. The description in regulations made under section 790B(1)(b), (SI 2016/ 339), are that it has voting shares admitted to trading on a regulated market in an EEA state other than the UK, or on a market listed in Schedule 1 to those regulations. Those listed in Schedule 1 are certain markets in Israel, Japan, Switzerland and the USA.

Section 63: Confirmation statements: offences

  1. This section amends sections 853J(4) of the Companies Act 2006 (the Act) to align, with the terminology used in analogous contexts throughout the Act, the description of those who may commit an offence for failure to comply with any duty imposed by regulations made under section 853J(1). The section makes the same amendment to section 853(L)(1) of the Act in respect of the offence of failing to submit a confirmation statement within the prescribed time period.

Identity verification

Section 64: Identity verification of persons with significant control

  1. This section inserts sections 790LI, 790LJ, 790LK, 790LL, 790LM, 790LN, 790LO and 790LP into the Companies Act 2006. Sections 790LI to 790LP introduce the identity verification requirements for persons and legal entities with significant control in companies defined under section 790C and registrable under Part 21A of the Companies Act 2006. A Person with Significant Control (PSC) is an individual who meets at least one of the specified conditions in Schedule 1A of the Companies Act 2006. A company must take reasonable steps to identify its PSCs and provide information on its PSCs to the Registrar. Where a company is owned or controlled by a legal entity which meets at least one of the specified conditions in Schedule 1A of Companies Act 2006, it can be a registrable relevant legal entity (RLE) in relation to the company. It is a RLE if it is subject to UK PSC requirements, or has voting shares admitted to trading on a regulated market in the UK or EEA, or on specified markets in Switzerland, the USA, Japan or Israel. The RLE is registrable in relation to a company if it is the first RLE in the company’s ownership chain. This section therefore refers to registrable persons and registrable relevant legal entities as defined by section 790C.
  2. As only individuals can verify their identity, a RLE must provide information on its relevant officer as defined by section 790LK(6) whose identity is verified. The purpose of the identity verification of a relevant officer is to ensure that a verified individual is always traceable for each RLE. RLEs must therefore ensure that a verified relevant officer is notified to the Registrar and this information is updated when there are changes to the relevant officer. This section also uses the term ‘registered officer’ as defined by section 790LN(2) to specify the circumstances in which the duty of relevant persons to file a verification statement applies.
  3. Sections 790LI to 790LP create duties, powers and offences to ensure, that (i) each PSC verifies their identity and maintains their verified status as long as they are registered with the Registrar and (ii) each RLE must verify the identity of their relevant officer and maintain the verified status of their registered officer as long as this RLE is registered with the Registrar. The duties in relation to identity verification of registrable persons (individual PSCs) are established under sections 790LI-LJ and 790LM and they do not apply to persons listed in section 790C(12)(a) to (d).
  4. Sections 790LJ and 790LL set out the transitional arrangements and apply identity verification duties to PSCs and RLEs that became registrable prior to sections 12B(2)-(4) and 790LB(1)-(3) coming into force.
    1. PSCs must within 14 days of the appointed day to deliver to the Registrar a statement that their identity is verified. PSCs must maintain their verified status from the expiry of this 14-day period as long as they are registered with the Registrar. The Secretary of State may, by regulations, set out the appointed day.
    2. RLEs must deliver to the Registrar within 28 days of an appointed day a statement specifying the name of its verified relevant officer, together with a statement by that individual confirming that they are a relevant officer of the entity. RLEs must maintain a verified relevant officer from the expiry of this 28-day period as long as this RLE is registered with the Registrar. The Secretary of State may, by regulations, set out the appointed day.
  5. Under section 12A subscribers must deliver a statement of initial significant control to the Registrar. This statement may be accompanied by a statement which identifies a registrable person or a relevant officer on behalf of a RLE who has verified their identity. This subscribers’ statement on identity verification is however voluntary, and if it is not provided, the Registrar will issue a direction under section 790LI or 790LK.
  6. Section 790LI gives the Registrar a power to direct a PSC to deliver to the Registrar a statement confirming that the PSC’s identity is verified. To comply with this direction and properly deliver this statement, the PSC must verify their identity beforehand. The Registrar will make such direction in two cases. First is where a person becomes a PSC on incorporation of a company, but the subscribers did not confirm under section 12B(2) that this PSC’s identity is verified. The second is where a person becomes a PSC after incorporation of a company, but the company did not confirm under section 790LB(1) that identity of this PSC was verified. The Registrar will also make a direction if in both cases the subscribers’ or company’s statements were false.
  7. The Registrar will not make a direction and any direction made will lapse, if the Registrar receives a notification under section 790LD(1). Such notification must confirm that although a person was named in an application to form a company as a future PSC, they did not so become. A company should file such notification for example, when a future PSC died before the Registrar issued a certificate of incorporation. Registrable persons have 14 days in which to provide the verification statement when directed to do so by the Registrar.
  8. Section 790LM creates a duty on the registrable person to maintain their verified status as long as they are registered with the Registrar. The relevant period for compliance is defined under section 790LM(2). When this compliance period starts depends on when the statement confirming that the PSC has verified their identity was delivered, or should have been delivered with the Registrar. If this PSC ceased to be verified under regulations made under section 1110A(3), they should reverify their identity. If they fail to do so they will be exposed to criminal liability under section 790LP. New duties and powers in relation to identity verification of registrable RLEs are established under sections 790LK, 790LN and 790LO.
  9. Section 790LK gives the Registrar a power to direct an RLE to deliver to the Registrar certain statements. For the RLE to comply with this direction and properly deliver all the statements, an RLE’s relevant officer must verify their identity beforehand. The purpose of this provision is to verify the identity of individuals managing RLEs and through that ensure the transparency of who is controlling companies.
  10. A person can only be a relevant officer of an RLE, if they are an individual (section 790LK(2)(i)) and they fall under the definition in section 790LK(6). Only persons who are directors, members, or in a role equivalent to a director should be notified and verified as relevant officers of an RLE. A relevant officer cannot be a body corporate.
  11. The RLE must deliver a statement made by itself (referred to as "this entity"), confirming the name of its relevant officer and confirming that this relevant officer’s identity is verified according to section 1110A. Additionally, the RLE must deliver a statement on behalf of the relevant officer confirming that their relationship with RLE makes them the RLE’s relevant officer.
  12. The two cases in which the Registrar will make such direction are similar to those under section 790LI. First is where an entity becomes an RLE on incorporation of a company, but the subscribers did not make statements under section 12B(3). The second is where an entity becomes an RLE after incorporation of a company, but the company did not make statements under section 790LB (2) or (3). The Registrar will also make a direction if in both cases the subscribers’ or company’s statements were false.
  13. The Registrar will not make a direction and any direction made will lapse, if the Registrar received a notification under section 790LD(1). Such notification must confirm that although an entity was named in an application to form a company as a future RLE, it did not so become. A company should file such a notification for example, when a future RLE was dissolved before the Registrar issued a certificate of incorporation.
  14. Section 790LN obliges the RLE to ensure that the individual notified to the Registrar of Companies as the relevant officer of an RLE meets the criteria of a relevant officer and has their identity verified with the Registrar as long as the RLE is registered with the Registrar. The purpose of this section is twofold. First, to ensure, that whoever is notified by the RLE as a relevant officer meets the criteria under section 790LK(6). It means that this individual must be in a senior managing position, like a director, a member or other officer with functions like a director of a company. If an individual notified to the Registrar as a relevant officer dies or resigns from being a director of the RLE, they will not meet the criteria under section 790LK(6) anymore. To avoid a breach of section 790LN, the RLE should notify the Registrar about its new director (relevant officer) under section 790LO. The second purpose is to ensure that the registered relevant officer always has their identity verified with the Registrar of Companies. As a consequence, if this person ceases to be verified under regulations made under section 1110A(3), they should reverify their identity. If they fail to do so they may be exposed to criminal liability under section 790LP.
  15. In general terms, as long as an entity is notified to the Registrar as an RLE of a company, it must have a verified, relevant officer registered. The relevant period for compliance with the duty under section 790LN is defined in subsection (3). When this compliance period starts depends on when statements about the relevant officer were filed, or should have been filed with the Registrar. Section 790LN(4) provides for a 28 days grace period after a registered officer ceased to be a relevant officer. During this compliance period the RLE should notify the Registrar about any new relevant officer under section 790LO to avoid breaching section 790LN. 
  16. Section 790LO allows an RLE to change its registered officer by giving notice to the Registrar. An RLE will file such notice, for example, when the individual notified to the Registrar as a relevant officer dies, stops meeting the relevant officer criteria (for example resigned from the position of a director, or their appointment was terminated), or the RLE merely decides to notify another person as a relevant officer. When notifying the change of registered relevant officer, the RLE must make equivalent statements as under section 790LK(2).
  17. Section 790LP creates offences for failure, without reasonable excuse, to comply with duties under sections 790LI to 790LN. If the offence is committed by a RLE, its officers in default also commit an offence.

Section 65: Procedure etc for verifying identity

  1. This section inserts sections 1110A and 1110B into the Companies Act 2006. Section 1110A introduces the meaning of "identity is verified".
  2. Section 1110A(1) provides, that an individual’s identity is verified if the person has verified their identity with the Registrar directly or a verification statement in respect of the person has been delivered to the Registrar by an authorised corporate service provider. Irrespective of whether the individual’s identity becomes verified by verification with the Registrar directly or via an authorised corporate service provider, both verification methods must comply with the requirements under regulations made by the Secretary of State under section 1110B. Compliance with the section 1110B regulations will have to be confirmed by the authorised corporate service provider in the verification statement.
  3. Section 1110A(2) defines a verification statement for the purpose of section 1110A, as a statement made by an authorised corporate service provider (defined under the new 1098A of Companies Act 2006) confirming that an individual’s identity has been verified in accordance with the verification requirements in section 1110B.
  4. Section 1110A(3) provides that a verification statement must also specify the authorised corporate service provider’s supervisory authority or authorities for the purposes of the Money Laundering Regulations. The Registrar will be required to make verification statements available for public inspection. Including an authorised corporate service provider’s supervisor(s) on the verification statement will mean that the public can see this information, thereby increasing the register’s transparency.
  5. Section 1110A(4)provides that the Secretary of State may, by regulations, make further provision about the contents of a verification statement, including a provision to amend this section.
  6. Verification statements in the meaning of section 1110A(2) must be distinguished from statements solely confirming that an individual’s identity is already verified. They are required for example under sections 12(2A), 12B, 167G(3)(c), 790LB(1)-(2), and 1067A, they do not count for the purpose of section 1110A(1)(b) and do not fall under the definition in subsection (2). Verification statements under section 1110A(2) can only be delivered by authorised corporate service providers and their delivery has the legal effect of changing individual’s verification from unverified to verified. By contrast, other statements solely confirming that individual’s identity is verified have only declaratory effect. The effect of section 1110A(5) is to allow both types of statements to be delivered at the same time.
  7. Section 1110A(6) provides that the Secretary of State may by regulations, set out the circumstances in which someone ceases to be an individual whose identity is verified.
  8. Section 1110A(7) provides, that those regulations can confer discretion on the Registrar, and that someone ceases to be an individual whose identity is verified unless within a specified period of time their identity is reverified. Reverification will require individuals to verify their identity either directly with the Registrar or by an authorised corporate service provider delivering a statement to the Registrar.
  9. Section 1110B(1) gives the Secretary of State the power to make regulations in connection with identity verification and reverification, both by the Registrar directly, as well as by an authorised corporate service provider.
  10. Section 1110B(2)(a) provides that the regulations may make provisions about the procedure for verifying or reverifying of individual’s identity (including evidence required). Subsection (2)(b) also provides that the regulations can also make provision about the records a person who is or has been an authorised corporate service provider has to keep in connection with verifying or reverifying an individual’s identity. Subsection (3) allows offences to be created for authorised corporate service provider failing to keep these records. This will ensure that, if ever required, there is some record in which to check that the standard of identity verification complies with those set out under section 1110B. Subsection (4) sets out the maximum available sentences which can be made in the regulations made under section 1110B.
  11. Provisions under these regulations can confer discretion on the Registrar, including provisions to impose requirements by Registrar’s rules. Procedure could include specifying different methods of identity verification in line with best practice which is likely to evolve over time. Regulations under section 1110B will be subject to an affirmative resolution procedure.

Section 66: Authorisation of corporate service providers

  1. This section inserts sections 1098A to 1098H (authorised corporate service providers) into the Companies Act 2006. These provisions set out the definition of an authorised corporate service provider and how they will interact with the Registrar.
  2. There is currently no legal requirement for individuals supplying documents to the Registrar to confirm who they are and that they have been authorised to act on behalf of their clients. This section introduces new requirements for those corporate service providers wishing to file documents on behalf of corporate clients with the Registrar to be authorised to do so.
  3. This section also amends section 1087 to clarify that documents delivered to the Registrar under sections 1098B, 1098D, 1098E and regulations made under section 1098G are not available for public inspection. This ensures that authorised corporate service provider applications remain private between the applicant and the Registrar and that personal data is suitably protected.
  4. Section 1098A defines an "authorised corporate service provider" and section 1098B provides for who can apply to become one and the information the application must contain. Crucially under s1098B(5), the Registrar must refuse the application if it appears to the Registrar that the application it not a fit and proper person to carry out the functions of an authorised corporate service provider. Section 1098C prescribes the required information about an applicant and section 1098D prescribes who can make an application on behalf of a firm.
  5. To obtain authorised corporate service provider status, an applicant must (in the case of an individual) have their identity verified and must be a "relevant person" for anti-money laundering purposes. The applicant must also meet any other requirements imposed by regulations made by the Secretary of State. If the application is made by a firm rather than an individual, the application must be delivered to the Registrar on the firm’s behalf by a "relevant officer" and must include a statement by the individual confirming their status as the firm’s relevant officer. Section 1098D sets out who the relevant officer is depending on the type of firm.
  6. Section 1098E makes it an offence for an authorised corporate service provider without reasonable excuse to fail to update the Registrar of changes to their supervisory authority under the Money Laundering Regulations within 14 days beginning with the date when the change occurred. This is so that they cannot act as an authorised corporate service provider when they do not have a supervisory authority.
  7. Section 1098F states that a person ceases to be an authorised corporate service provider if they cease to be a relevant person as defined in the Money Laundering Regulations. The Secretary of State may also by regulations made under section 1098F(2) provide other circumstances in which an authorised corporate service provider’s authorisation ceases or is suspended, including conferring a discretion on the Registrar. These regulations can further include provisions about procedure, the period of suspension and the revocation of a suspension and confer.
  8. Section 1098G confers a power on the Secretary of State to make regulations which impose duties on authorised corporate service providers to provide information to the Registrar in accordance with regulations. These regulations may include requiring information on request, on the occurrence of an event or at regular intervals. Section 1098G(3) states that the circumstances in regulations made under section 1098F(2) to cease or suspend an authorised corporate service provider’s status can include not complying with these information provision duties. Section 1098G(4) states that the information provision regulations made under section 1098G(4) can also create offences in relation to compliance with these regulations and section 1098G(5) sets out the maximum available sentences.
  9. Section 1098H contains a power for the Secretary of State to make regulations which would enable a person subject to money laundering regimes abroad to become authorised corporate service providers.

Section 67: Exemption from identity verification: national security grounds

  1. This section inserts new section 1110C into the Companies Act 2006, which provides that the Secretary of State may by written notice exempt a person from identity verification requirements if it is necessary to do so: (a) in the interests of national security, or (b) for the purposes or preventing or detecting serious crime (subsection (1)).
  2. Section 1110C(2E) sets out the effects of the exemption for individuals subject to a written notice. This includes not requiring a statement of identity verification for a proposed officer who is named as a director in an application to form a company, not having to notify the Registrar if a person is made director, exempted people being able to act as a director without having their identity verified and without being notified to the Registrar, not requiring a statement of identity verification on delivery of document to the Registrar. This exemption also means that a company is not required to ensure that an unverified individual does not act as a director.
  3. Subsection (3F) defines the meaning of ‘crime’ and explains that it is means conduct that is either a criminal offence, or would be a criminal offence if it took place in any one part of the United Kingdom. It is ‘serious crime’ if it would lead, on conviction, to a maximum prison sentence of 3 years or more, or if the conduct involves the use of violence, results in substantial financial gain or is conduct by a large number of persons in pursuit of a common purpose. 

Section 68: Allocation of unique identifiers

  1. This section amends section 1082 and 1087 of the Companies Act 2006.
  2. Amendments to section 1082 expand the Secretary of State’s power to allocate unique identifiers.
  3. Amendment to section 1082(1) allows the Registrar to issue a unique identifier in connection with the register or any dealings with the Registrar. This means that the unique identifiers can be issued in relation to any interaction with the Registrar, not only in relation to the register as defined in section 1080(2).
  4. Subsections 1082(1)(ba) and (bb) provide that the Secretary of State may make provisions in regulations for the use of the unique identifiers to identify an authorised corporate service provider and an individual whose identity is verified (see section 1110A(1)). Introduction of unique identifiers for these categories of persons, will allow the Registrar to identify individuals delivering documents to the Registrar and those registered as directors or People with Significant Control, in the database of verified individuals.
  5. Subsection 1082(2)(d)(i)-(ii) also expands the Secretary of State’s permitted scope to make regulations about unique identifiers by allowing the Registrar to cancel or replace a unique identifier. This may be required for example, where an individual’s unique identifier has been compromised or shared with a third party who should not have access to it anymore.
  6. This section further amends section 1087 of the Companies Act 2006, ‘Material unavailable for public inspection’. This amendment ensures that unique identifiers and all statements relating to them are not available for public inspection, thereby helping to protect personal information and against the fraudulent use of unique identifiers.

Section 69: Identity verification: material unavailable for public inspection

  1. This section amends section 1087 of the Companies Act 2006 ‘Material unavailable for public inspection’, by inserting new section 1087(1)(gd). The amendment extends the list of materials unavailable for public inspection to any statements delivered to the Registrar of Companies, and forming part of the register of companies, under the provisions listed. This is to ensure that detailed information contained in certain statements relating to identity verification remains private between the individual submitting them and the Registrar of Companies. Crucially, this includes statements informing the Registrar of Companies that an individual falls into an identity verification exemption as specified in regulations. This provision helps to protect personal and sensitive information.

Striking off and restoration to the register

Section 70: Registrar’s power to strike off company registered on false basis

  1. This section amends the Companies Act 2006 to provide the Registrar with an additional power, to expedite the strike-off of a company if she has reasonable grounds to believe the application for incorporation (or administrative restoration) contained false or misleading information or was based on a false statement.

Section 71: Requirements for administrative restoration

  1. This section amends section 1025 of the Companies Act 2006. Section 1025 sets out the requirements for an administrative restoration of a company, following the company being struck off from the register under section 1000 or 1001 (power of registrar to strike off defunct company) of the Companies Act 2006.
  2. The amendment to section 1025 will mean that, as a precondition for making any application for administrative restoration, penalties under section 453 or corresponding earlier provisions (civil penalty for failure to deliver accounts) will need to have been paid, as will outstanding fines or civil penalties payable in respect of the company for any offence under the Companies Acts by the applicant or any persons who were directors immediately pre-dissolution or pre-strike off who will also be directors upon restoration.

Who may deliver documents

Section 72: Delivery of documents: identity verification etc

  1. This section inserts section 1067A into the Companies Act 2006. Section 1067A sets out who is permitted to deliver documents to the Registrar, including restricting permission to those who have their identity verified, or are registered as an authorised corporate service provider.
  2. Section 1067A(1) provides the requirements of delivery of documents on a person’s own behalf. Subsection (1)(a) provides that an individual who delivers a document to the Registrar on their own behalf must have their identity verified, and under subsection (1)(b) the document must be accompanied by a statement confirming their verified status. Subsection (2) provides the requirements of delivery of documents on behalf of another. An individual (A) cannot deliver a document to the Registrar on behalf of another person (B) unless A satisfies the relevant descriptions set out in column 2 in the table in subsection (2), and provides an accompanying statement specified in the corresponding entry in column 3 confirming their description and that they have B’s authority to file.
  3. Where B is a firm, A must fall into one of the following categories to be permitted to deliver documents on behalf of B:
    1. An individual who is an officer or employee of the firm and whose identity is verified,
    2. An individual who is an officer or employee of a corporate officer of the firm and whose identity is verified,
    3. An individual who is an authorised corporate service provider as defined by section 1098A (this includes that individual authorised corporate service providers must have their identity verified), or
    4. An individual who is an officer or employee of an authorised corporate service provider.
  4. Where B is an individual, A must fall into one of the following categories to be permitted to deliver documents on behalf of B:
    1. An individual whose identity is verified,
    2. An individual who is an authorised corporate service provider as defined by section 1098A (this includes that individual authorised corporate service providers must have their identity verified), or
    3. An individual who is an officer or employee of an authorised corporate service provider.
  5. The purpose of this provision is to serve as a deterrent to unauthorised individuals delivering documents to the Registrar. An individual who makes a false statement required by column 3 of section 1067A(2) whilst delivering a document to the Registrar will be committing a general false statement offence under section 1112 or section 1112A of the Companies Act 2006. This can happen for example when an individual (A) was not verified.
  6. Section 1067(2) also requires that individuals who file on behalf of firms are either an officer or employee of the firm, or an authorised corporate service provider (or their employee). Under section 1173, in Companies Act 2006, a "firm" means any entity, whether or not a legal person, that is not an individual and includes a body corporate, a corporation sole and a partnership or other unincorporated association. Section 1173 defines the term "officer" in relation to a body corporate with a non-exclusive list of roles that includes a director, manager or secretary. The interpretation of the term officer for the purpose of section 1067A should include any individual in a position akin to director, such as for example a member of a limited liability partnership. The purpose of these filing restrictions is to ensure that individuals or firms who provide corporate services to other firms must register as an authorised corporate service provider in order to file documents with the Registrar.
  7. Section 1067A(3) clarifies who meets the criteria under row 2 of the table of being one of a firm’s officer in relation to a corporate officer that has only corporate officers. Corporate officer is defined in section 1067A(8).
  8. Under section 1067A(4), the Secretary of State may by regulations change the restrictions on individuals who are able to deliver documents on their own behalf or on behalf of another person. The regulations under section 1067(4)(a) may create exceptions to any requirements provided in subsections (1) and (2), including for example from the requirement that certain individuals must have their identity verified. The regulations made under subsection (4)(b) may amend section 1067A for the purpose of changing the effect of the table in subsection (2).
  9. Under section 1067A(5) the regulations creating exceptions under section 1067A(4)(a) may also (i) require any document delivered to the Registrar in reliance on an exception to be accompanied by a statement and (ii) amend section 1067A. Under section 1067A(6) the regulations may also require any document delivered to the Registrar in reliance of an exception to be accompanied by additional statement or additional information in connection with the subject matter of the statement.
  10. Regulations under section 1067A are subject to affirmative resolution procedure.

Section 73: Disqualification from delivering documents

  1. This section inserts section 1067B into the Companies Act 2006.
  2. Subsection (1) provides that a document cannot be delivered to the Registrar by a disqualified person either on their own or another’s behalf. According to section 1072(1)(aa) inserted by section 72 of ECCT Act, such a document is not properly delivered, as it would breach the provisions on who may deliver a document to the Registrar.
  3. Under subsection (2) a document can be delivered to the Registrar on behalf of a disqualified person only through an authorised corporate provider as defined by section 1098A, or through an officer or employee of an authorised corporate provider.
  4. Filing via an authorised corporate provider allows disqualified individuals to continue to file certain documents with the Registrar. This includes where they are under a legal obligation to do so (discrepancy reporting under the Money Laundering Regulations) or making applications made under regulations under section 1088 of the Companies Act 2006. It also means that a disqualified corporate director can continue to file in its capacity as a company (including complying with its legal filing obligations) even though it cannot file on behalf of another entity for which it is a corporate director. Filing via an authorised corporate provider should ensure that the disqualified are only involved in activities permitted to by law and are not for example breaching disqualification orders.
  5. Subsections (3)-(5) specify statements that a person delivering a document to the Registrar must make. First is a statement confirming that a person is not a disqualified person. Second is a statement that specifies whether this person delivers the document on their own or another’s behalf. If a person is delivering a document on behalf of another they must specify if the person on whose behalf they act is disqualified.
  6. The definition of a disqualified person is provided in section 159A(2). It covers persons disqualified under the Companies Directors Disqualification Act 1986, including sections 11 and 11A, which concern: undischarged bankrupts, persons subject to bankruptcy restrictions order or undertakings, debt relief restrictions orders or undertakings and moratoriums under the debt relief orders as well as persons subject to director disqualification sanctions under the Sanctions and Anti-Money Laundering Act 2018.
  7. Subsection (7) allows the Secretary of State to make regulations to amend this section for the purpose of changing who may deliver a document to the Registrar on behalf of a disqualified person.

Section 74: Proper delivery: requirements about who may deliver documents

  1. This section supplements existing provisions for proper delivery of documents under section 1072 of the Companies Act 2006 by amending the section to add the condition that relevant requirements as to who is permitted to deliver the document must also be met. This includes sections 1067A and 1067B.

Facilitating electronic delivery

Section 75: Delivery of documents by electronic means

  1. This section amends section 1068 of the Companies Act 2006. These changes allow the Registrar, by means of Registrar’s rules, to mandate the manner of delivery of documents, removing limitations on the Registrar’s ability to mandate electronic delivery. The section also repeals section 1069 of the Companies Act 2006 which currently places the power to mandate electronic delivery in the hands of the Secretary of State, by means of a power to make regulations specifying that. This is no longer needed in view of the freedom the Registrar has to prescribe this by way of rules. Finally, the section makes a consequential amendment to section 1072 by repealing the reference to section 1069.

Section 76: Delivery of order confirming reduction of share capital

  1. This section amends section 649 of the Companies Act 2006: registration of court order confirming reduction of share capital and statement of capital.
  2. Subsection (1) is amended to remove the requirement to produce an original court order. The production of a copy of the court order will continue to be required.
  3. This amendment makes section 649(1) consistent with other sections of the Companies Act 2006, where only a copy of the order is required for example section 1031(2).

Section 77: Delivery of statutory declaration of solvency

  1. This section amends section 89 of the Insolvency Act 1986: statutory declaration of solvency; and article 75 of the Insolvency (Northern Ireland) Order 1989.
  2. Paragraphs (3) and (6) of both provisions are amended to replace the requirement to produce an original declaration of solvency with the requirement to produce a copy of the declaration of solvency.

Section 78: Registrar’s rules requiring documents to be delivered together

  1. This section inserts section 1068A into the Companies Act 2006. It confers a general power on the Registrar to make rules that for filings that consist of more than one document, that all component parts must be filed together.

Promoting the integrity of the register

Section 79: Power to reject documents for inconsistencies

  1. This section inserts section 1073A into the Companies Act 2006. This gives the Registrar the power to reject documents which are not consistent with information held by the Registrar or available to the Registrar and where that gives the Registrar reasonable grounds to doubt whether the document complies with any requirements as to its contents. A document that is refused under this power is treated as not having been delivered.

Section 80: Informal correction of document

  1. This section omits section 1075 (informal correction of document) of the Companies Act 2006 and amends sections 1081 and 1087. The effect is to remove the Registrar’s existing ability, to correct documents, pre-registration, which appear internally inconsistent or incomplete, with a company’s consent.

Section 81: Preservation of original documents

  1. This section amends section 1083 of the Companies Act 2006 to reduce the period for which the Registrar must retain hard copy documents the contents of which have been recorded from three years to two years.

Section 82: Records relating to dissolved companies etc

  1. This section amends section 1084 of the Companies Act 2006 (records relating to companies that have been dissolved etc.) and extends the provision to also apply in Scotland.
  2. Section 82(2) amends section 1084 to:
    1. Insert in subsection (1) a definition of "relevant date" as the date on which the company was dissolved, the overseas company ceased to have that connection with the United Kingdom, or the institution ceased to be within section 1050.
    2. After subsection (1) insert subsection (1A), which will allow the Registrar to refrain from making information contained in records relating to the company or institution available for public inspection after 20 years of the relevant date.
    3. Substitute subsections (2) and (3), with new subsections (2), (2A) and (3). These allow the Registrar for England and Wales (and the Registrar for Northern Ireland) to remove records to the Public Records Office (of Northern Ireland) at any time after two years of the relevant date. Records disposed of under new subsection (2) and (2A) are to be disposed of under enactments relating to the Public Records Office (of Northern Ireland).
  3. Section 82(3) omits section 1087ZA (required particulars available for public inspection for limited period). Section 1087ZA required that dissolved records relating to People with Significant Control (PSC) were made available for public inspection for 10 years, rather than 20 years like all other records. The effect of this omission is that dissolved PSC records will now be kept for 20 years before being removed.

Section 83: Power to require additional information

  1. This section inserts sections 1092A, 1092B and 1092C into the Companies Act 2006. These provisions introduce a new power to require information to be provided to enable the Registrar to determine i) whether a person has satisfied a statutory requirement to deliver a document, and ii) whether information contained in a document that has been delivered constitutes information required to be maintained by the Registrar in the records she curates under her duty in section 1080(1)(a) of the 2006 Act. That duty is engaged in relation to documents delivered under an enactment which meet the proper delivery requirements in section 1072 of the 2006 Act.
  2. Under section 1092B, failure, without reasonable excuse, to comply with an information requirement is an offence on the part of an individual and, where committed by a firm, by every officer in default. Conviction on indictment attracts a custodial sentence of up to two years, a fine or both. On summary conviction in England and Wales the guilty party is liable to imprisonment for a term up to the general limit in the magistrates’ court or a fine, or both. On summary conviction in Scotland and Northern Ireland, offences carry custodial sentences of up to 12 and 6 months respectively and, in both cases (alternatively or in addition), a fine up to the statutory maximum and a daily default fine of up one-fifth of the statutory maximum for continued contravention.
  3. Subject to certain exceptions, section 1092C protects persons against self-incrimination in criminal proceedings by rendering inadmissible in that context statements they make in response to a requirement for information under section 1092A. The exceptions to this protection are in respect of offences committed under sections 1112 and 1112A of the Companies Act 2006, section 5 of the Perjury Act 1911, section 44(2) of the Criminal Law (Consolidation)(Scotland) Act 1995, Article 10 of the Perjury (Northern Ireland) Order 1979 (S.I. 1979/1714 (N.I. 19)), section 32 of the Economic Crime (Transparency and Enforcement) Act 2022, section 30 or 31 of the Limited Partnerships Act 1907 and any other offences which involve making a misleading, deceptive or false statement to the Registrar. No material provided to the Registrar pursuant to a requirement to provide additional information under section 1092A shall be available for public inspection on either the companies register or the Register of Overseas Entities.

Section 84: Registrar’s notice to resolve inconsistencies

  1. This section amends section 1093 of the Companies Act 2006 by expanding the scope of the information the Registrar can consider when determining whether it is appropriate to issue a notice requiring a company to resolve an inconsistency. That will now include all information in the Registrar’s possession as a consequence of a requirement of section 1080 of the Companies Act 2006 rather than just information concerning companies. Any notice must state the nature of the inconsistency and give the company 14 days from the date it bears to take all reasonable steps to resolve the inconsistency.

Section 85: Administrative removal of material from the register

  1. This section amends and enhances the Registrar’s powers to remove material from the register by substituting section 1094 into the Companies Act 2006, along with inserting new sections 1094A and 1094B. The categories of material which may be removed are those which have been accepted despite not meeting proper delivery requirements, and those defined by the Companies Act 2006 as unnecessary material. The Registrar may take a unilateral decision to remove material or do so upon application.
  2. New section 1094A requires the Secretary of State to make regulations establishing the notice requirements that should apply where the Registrar has unilaterally exercised the power to remove material. The Secretary of State may also make regulations regarding the process to be followed for applications for removal and how such applications are to be determined. Regulations can confer a discretion on the Registrar and, in both cases, will be subject to the negative procedure.
  3. New section 1094B provides that a party with sufficient interest can apply to the court to make such consequential orders as the court thinks fit as to the legal effects of the inclusion of the material on the register or its removal. The circumstance in which such an order could be sought include where the Registrar has determined that anything purported to be delivered to the Registrar under any enactment was not in fact delivered under an enactment and therefore not form part of the register.
  4. Finally, the section provides that any removal application or related material shall not be available for public inspection, and it repeals sections 1095 and 1095A of the Companies Act 2006, both of which are rendered obsolete by the substitution of section 1094.

Section 86: Rectification of the register under court order

  1. The section amends the existing provision relating to the removal from the register of material which has legal consequence in section 1096 of the Companies Act 2006 so that the court may now take into consideration whether the interests of an applicant for removal (as well as the company concerned) should outweigh the interests of other parties with an interest in its retention.
  2. The section also introduces a provision affirming that the court’s jurisdiction to make a rectification order does not extend to material delivered to the Registrar under Part 15 of the Companies Act 2006 relating to Accounts and reports.

Section 87: Power to require businesses to report discrepancies

  1. This section inserts new section 1110D into the Companies Act 2006 which gives the Secretary of State the power to make regulations in relation to discrepancy reporting.
  2. These regulations may require businesses to obtain specified information on their customers, or prospective customers, and report to the Registrar any discrepancies between the information obtained and that which the Registrar holds. The method of identifying and reporting these discrepancies may be set out in secondary legislation.
  3. Regulations under this section may also specify that reports on discrepancies made by businesses are to be withheld from public inspection.
  4. The regulations may also create offences for those who do not comply with reporting requirements. The penalty for this offence can be set in regulations to a maximum of 2 years imprisonment for conviction on indictment and 6 months for summary conviction.

Inspection etc of the register

Section 88: Inspection of the register: general

  1. This section makes consequential amendments to section 1085 (inspection of the register) of the Companies Act 2006. This takes account of amendments under section 81 to omit section 1087ZA from s1085(3) and to add new section 1087ZB: Exclusion of material from public inspection pending verification, inserted into the Companies Act 2006 by section 82(5).
  2. The effect of this is that material provided under new section 1087ZB may not be inspected by any person and that dissolved PSC records that are between 10 and 20 years old may now be inspected by any person.
  3. Subsections 64(6A), 67(1A), 73(7), 75(4A), 76(5A), 76A(9) and 76B(9) are also excluded from the requirement on the Registrar to make material available for public inspection. These sections all deal with circumstances where the Registrar is empowered to suppress a company’s name where it has been directed or ordered to change it. Once identified, the Registrar need not make these company names available for public inspection.

Section 89: Copies of material on the register

  1. This section amends sections of the Companies Act 2006 relating to copies of material on the register.
  2. Section 89(2) amends section 1086: right to copy of material on the register, by clarifying that the right to copy of material on the register only applies to those that are available for public inspection and omits section 1086(3).
  3. Section 89(3) amends section 1089: form of application for inspection or copy, by omitting subsection (2). The effect of this is to remove the option that an applicant has for submitting in paper form or electronically an application to inspect the register or obtain a copy of register material.
  4. Section 89(4) substitutes a new section 1090: form and manner in which copies to be provided, to allow the Registrar to determine the form and manner in which copies of register material are to be provided under section 1086.
  5. Section 89(5) amends section 1091: certification of copies as accurate, by:
    1. Substituting subsections (1)-(2) to require the Registrar to certify true copies if the applicant expressly requests this;
    2. Allowing the Registrar to certify copies with the Registrar’s official seal rather in writing in all cases.

Section 90: Material not available for public inspection

  1. This section amends section 1087 of the Companies Act 2006 (material not available for public inspection). This section extends the circumstances where material must not be made available for public inspection to any record of the information contained in a document (or part of a document) mentioned in any of the previous paragraphs of section 1087(1).

Section 91: Protecting information on the register

  1. This section amends sections 790ZF and 1087 of the Companies Act 2006, and substitutes section 1088, which is a power to make secondary legislation providing for the protection of registered material.
  2. This section extends the instances where individuals can apply to have their personal information on the register "suppressed" or "protected" from the public register, i.e. so that the information is no longer displayed publicly, or disclosed by the Registrar except in specified circumstances. This doesn’t exempt them from providing the information to the Registrar, where that is still required by legislation, but means that once delivered the information will not longer be displayed on the public register.
  3. This section makes amendments to the sections of the Companies Act 2006 which allow applications for personal information to be "suppressed" or "protected" and which require this information to made unavailable for public inspection – section 1087, section 1088, section 790ZF and section 790ZG.
  4. Section 91(2) omits subsection (3) from section 790ZF (protection of information as to usual residential address of PSCs). Subsection (3) of section 790ZF states that subsection (1) of section 790ZF does not apply to information relating to a person if an application under regulations made under section 790ZG has been granted with respect to that information and not been revoked. This is omitted so that provisions which restrict the use and disclosure of information under sections 240-244 can apply to information protected under section 790ZG.
  5. Section 91(3) makes amendments to section 1087 (material not available for public inspection):
    1. In subsection (1) of section 1087, paragraph (e) is substituted, so that any application or other document delivered to the Registrar under regulations under new section 1088 is not made available for public inspection, other than "replacement" information (see new section 1088(5)). New paragraph (e) also requires that any information which regulations made under new section 1088 require not to be made available for public inspection, are not. An example of "replacement" information is where someone has changed name, and wants their new name to appear on the public register in place of their old name, for example, in cases of domestic abuse.
    2. Subsection (2) of section 1087 is substituted with a new subsection (2) which is more prescriptive. New subsection (2) states that where subsection (1), or a provision referred to in subsection (1), imposes a restriction by reference to material deriving from a particular description of document (or part of document), that doesn’t affect the availability for public inspection of the same information in material derived from another description (or part of a document) in relation to which no restriction applies. This means that if an address is protected in one document, such that it is not made available for public inspection, it doesn’t mean it cannot be made available for public inspection if contained in a different document.
  6. Section 91(4) substitutes section 1088 (Application to Registrar to make address unavailable for public inspection) for new section 1088 (Power to make regulations protecting material). Section 1088 allowed only for addresses to be suppressed from the public register, whereas the substituted section 1088 allows the Secretary of State to make regulations making provision to protect addresses, as well as additional categories of personal information, such as business occupations, signatures, the day of dates of birth, addresses and names. The substituted section 1088 is modelled on existing section 1088 and existing section 790ZG.
  7. Regulations under substituted section 1088 may make provision requiring the Registrar to protect information with or without an application. Regulations may require the Registrar to protect information in all cases – i.e., without an application – if new information were later required which would not normally be made available for public inspection, such as an individual’s email address. Regulations may also confer a discretion on the Registrar.
  8. Subsections (6), (8) and (7) of new section 1088 relate to the disclosure of information protected under new section 1088. Subsection (6) states that one of the circumstances the regulations will specify, which allow the Registrar to disclose protected information, will include where the court has made an order. Subsection (7) states that regulations will not prevent disclosure under sections 243 or 244 (residential address information), new section 1087C(1)(date of birth information), any provisions under section 1046 which relates to these two sections, or new section 1110F (general powers of disclosure by the Registrar), as inserted by section 94.

Registrar’s functions and fees

Section 92: Analysis of information for the purposes of crime prevention or detection

  1. This section inserts section 1062A into the Companies Act 2006. This introduces a new function for the Registrar whereby the Registrar may carry out analysis of information for the purposes of crime prevention or detection. This includes information that is on the register, and other information available to the Registrar, including that obtained from external sources.
  2. Subsection (1) provides that the Registrar would only be expected to carry out this analysis where the Registrar considers it appropriate. This would include taking account of the resources available to the Registrar alongside other factors such as risk and threat assessments.
  3. The section will work alongside other sections in the Act, such as section 94, which, amongst other matters, permits the Registrar to share data for the purposes of the Registrar’s functions and contains the section 1110F that has been referred to in subsection (2) of this section. This means that the Registrar will be able to proactively share data so that it can be analysed, either by herself or the bodies that the Registrar shares with, for the purposes of crime prevention or detection.

Section 93: Fees: costs that may be taken into account

  1. This section amends section 1063 of the Companies Act 2006, which enables regulations to be used to require fees to be paid to the Registrar.
  2. Subsection 93(2) inserts subsection (3A). This will expand the functions which the Secretary of State may take into consideration when determining the level of fees to be paid to the Registrar. It will allow the costs of investigation and enforcement activities that contribute to the maintenance of a healthy business environment to be included. Subsection (3A)(a-g) set out the specific functions which may be taken into account.
  3. Subsection 93(3) amends the wording of subsection (4), so that regulations to determine the level of fee made under subsection (3) continue to be subject to the negative resolution procedure.
  4. Subsection 93(4) inserts subsections (6A) and (6B). Subsection (6A) enables the Secretary of State to use regulations to amend the reference to the functions carried out by the Insolvency Service on behalf of the Secretary of State, and to amend the reference to the functions carried out by the Insolvency Service in Northern Ireland on behalf of a Northern Ireland department. This will enable continuity should an alternative agency provide these or similar functions in future. Subsection (6B) requires that any such amendment of subsection (6A) must be by means of the affirmative resolution procedure.

Information sharing and use

Section 94: Disclosure of information

  1. This section amends sections 243 and 1059A and inserts sections 1110E, 1110F and 1110G into the Companies Act 2006.
  2. Section 243 includes a provision that enables the Secretary of State to make regulations to establish a mechanism through which applications can be made to the Registrar to refrain from divulging protected information to a credit reference agency. This amendment will enable any regulations made under this power to confer a discretion on the Registrar when dealing with such an application, and will enable the regulations to provide for a question to be referred to a person other than the Registrar in determining an application.
  3. Section 1110E (Disclosure to the registrar), enables any person to disclose information to the Registrar for the purposes of the exercise of any of the Registrar’s functions. This will facilitate information sharing for those bodies who currently face barriers disclosing information.
  4. Section 1110F (Disclosure by the registrar), enables the Registrar to disclose information to any person for purposes connected with the exercise of the Registrar’s functions, and to any public authority for purposes connected with the exercise of its functions. At present there are provisions in place that enable disclosure of the full date of birth and the usual residential address to specific bodies when requested. This section will effectively widen the current disclosure provisions, allowing the Registrar to disclose any information held, and to do so proactively where that disclosure enables the exercise of the Registrar’s functions, or the functions of a public authority.
  5. There is also a power in section 1110F to enable the Secretary of State to make regulation specifying any other person that the Registrar can share information with and under what circumstance.
  6. Section 1110G (Disclosure: supplementary) sets out that the disclosure powers do not authorise any disclosure if it would contravene data protection legislation, but any disclosures made under them do not breach any obligation of confidence owed by the person making the disclosure, or any other restriction that may be placed on the information. It also outlines how HMRC information may be handled, creating an offence where HMRC information is disclosed without authorisation from HMRC. This will facilitate disclosures from HMRC without risk of compromising HMRC who have strict provisions with respect to disclosures of HMRC information. It also states that information received under section 1110E or any other enactment enabling disclosure to the Registrar is not subject to the requirements regarding the delivery of documents as per the meaning provided at section 1114. Consequently, section 1114 has been amended to reflect this.

Section 95: Use or disclosure of director’s address information by companies

  1. This section inserts subsection (2) into section 241 of the Companies Act 2006, which makes it an offence if a company uses or discloses information in breach of subsection (1). An offence can be committed by the company and every officer in default. A person guilty on summary conviction in England and Wales is liable to a fine, and in Scotland or Northern Ireland, to a fine not exceeding level 5 on the standard scale and, for continued contravention, a daily default fine not exceeding one-tenth of level 5 on the standard scale.

Section 96: Use or disclosure of PSC information by companies

  1. This section substitutes existing section 790ZG of the Companies Act 2006 (Power to make regulations protecting material) of the Companies Act 2006 for new section 790ZG. The existing section 790ZG confers a power to make regulations requiring the Registrar and the company, on application, to refrain from using or disclosing PSC particulars.
  2. The new section is modelled on the existing section but makes some amendments. The new section allows the Secretary of State to make regulations which:
    1. Require a company to refrain from using, or refrain from disclosing, relevant PSC particulars except in circumstances specified in the regulations (this would be used if new information were later required about a PSC which would not normally be made available for public inspection, such as an individual’s email address);
    2. Confer a power on the Registrar, on application, to make an order requiring a company not to use or disclose relevant PSC particulars except in circumstances specified in the regulations.
  3. This section also requires the Registrar to protect any application or other document delivered to the Registrar under section 790ZG. Section 96 also creates inserts section 790ZH (offence of failing to comply with regulations under section 790ZG). Subsection (1) states that if a company fails to comply with a restriction on the use or disclosure of information imposed by virtue of regulations under subsection 790ZG, an offence is committed by the company, and every officer of the company who is in default. Subsection (2) states a person guilty of an offence on summary conviction in England and Wales is liable to a fine, and in Scotland or Northern Ireland, to a fine not exceeding level 5 on the standard scale and, for continued contravention, a daily default fine not exceeding one-tenth of level 5 on the standard scale.
  4. Section 96(3) substitutes section 1087(1)(bc) (material not available for public inspection). This no longer refers to section 1046, because regulations under that section do not make material unavailable for public inspection.

Section 97: Use of directors’ address information by registrar

  1. This section amends sections 242 and 243 of the Companies Act 2006. These amended sections remove the provision that restricts the Registrar from using directors’ residential addresses for anything other than communicating with the director.

Overseas companies

Section 98: Change of addresses of officers of overseas companies by registrar

  1. This section inserts subsection (6A) to section 1046 of the Companies Act 2006 providing that, where an overseas company is required to provide a service address or principal office address of a director or secretary, regulations may be made with provisions corresponding to section 1097B or 1097C empowering the Registrar to rectify the register relating to these addresses if it does not meet the statutory requirements or is inaccurate.

Section 99: Overseas companies: availability of material for public inspection etc

  1. This section amends section 1046 of the Companies Act 2006, which confers a regulation-making power to require overseas companies to register information. The section inserts new subsections (6B) and (6C) which make it clear that the regulations made under that power can provide for the information to be withheld from public inspection and that they can confer a discretion on the Registrar.

Section 100: Registered addresses of an overseas company

  1. This section inserts new section 1048A to the Companies Act 2006 and amends subsections (2) and (3) in section 1139.
  2. Section 1048A will provide the ability to make regulations which can require an overseas company to provide and maintain an appropriate address and appropriate email address. Appropriate address is defined in section 86(2) of Companies Act - broadly speaking, an address is appropriate if documents sent there will reach the company. Under subsection 1048A(3) Regulations made under section 1048A may include provisions allowing for withholding of certain information from public inspection as well as corresponding or similar to section 1097A. Regulations under section 1048A are subject to negative procedure.
  3. As a result of the amendments to subsections (2) and (3) of section 1139 the service of documents to an overseas company, whose particulars are registered under section 1046, will be effective at the company’s registered address (section 1048A(1)(a)) or registered address of any person residing in UK authorised to accept service on the company’s behalf.

Section 101: Overseas companies: identity verification of directors

  1. This section inserts new section 1048B into the Companies Act 2006.
  2. This section applies identity verification requirements to directors of overseas companies that are required to register particulars under section 1046. These companies are governed by the laws of other jurisdictions and operate in the UK.
  3. The new section 1048B creates powers for the Secretary of State to make provisions by regulations (under the negative procedure) requiring that each overseas company director is verified and that relevant statements (such as statements confirming that the director is verified) are delivered to the Registrar.
  4. The regulations may also include the provision for such statements to be withheld from the public register, provision for the application of the prohibition on acting as a director unless ID verified (section 167M) and provision for applying the exemption from identity verification on national security grounds (section 1110C).

General offences and enforcement

Section 102: General false statement offences

  1. This section substitutes section 1112 into the Companies Act 2006 and inserts a new section 1112A.
  2. The new section 1112 differs from the old provision by removing the need for a person to have "knowingly or recklessly" delivered, or caused to be delivered to the Registrar a document or statement which is false, deceptive or misleading in a material particular for an offence to occur. The emphasis is changed so that a false statement offence occurs where a person delivers a false, deceptive or misleading filing "without a reasonable excuse". The wording of this section mirrors the wording in the false filing offence in section 32 of the Economic Crime (Transparency and Enforcement) Act 2022.
  3. The reasonable excuse component ensures that the offence is not engaged in, for example, cases where a company reasonably relies on information provided by others which turns out to be untrue, or to prevent UK professionals assisting companies being prosecuted from having made an honest mistake.
  4. Subsection (4) of the substituted section 1112 sets the penalty for the basic offence; on summary conviction, unlimited fine in England and Wales, and level 5 on the standard scale in Scotland and Northern Ireland.
  5. New section 1112A adds an aggravated offence which is committed by a person who knows that the document or statement provided is misleading, false or deceptive in a material fact.
  6. Subsection (4) of new section 1112A sets the penalty for the aggravated offence; on indictment, to imprisonment for not more than 2 years or a fine (or both). For summary conviction, in England and Wales to imprisonment for a term not exceeding the general limit in a magistrates’ court or a fine (or both) and in Scotland or Northern Ireland, to imprisonment for a term not exceeding 12 months or a fine not exceeding the statutory maximum (or both).

Section 103: False statement offences: national security, etc defence

  1. This section amends the Companies Act 2006, by amending section 1059A(2) and inserting new section 1112B.
  2. New section 1112B provides a defence to the commission of an act that would otherwise be an offence, relating to the delivery of false, misleading or deceptive information to the Registrar.
  3. Subsection (1) provides that the Secretary of State may issue a certificate to a person, the effect of which is that the person is not liable for the commission of any offence relating to the delivery to the Registrar of a document that is false, misleading or deceptive or making a statement to the Registrar that is false, misleading or deceptive.
  4. Subsection (2) provides that the Secretary of State may only issue such a certificate if satisfied that the conduct amounting to such offence as described in subsection (1) is necessary in the interests of national security or for the prevention or detection of serious crime. Subsection (3) provides that the Secretary of State may revoke a certificate at any time.
  5. Subsection (4) defines the meaning of "serious crime" for the purposes of subsection (2). It explains that "crime" means conduct that is a criminal offence, or would be a criminal offence if it took place in any one part of the United Kingdom. It is "serious crime" if it would lead, on conviction, to a maximum prison sentence of three years or more, or if the conduct involves the use of violence, results in substantial financial gain, or is conduct by a large number of persons in pursuit of a common purpose.
  6. This section also makes a consequential amendment to section 1059A by inserting a reference to new section 1112B.

Section 104: Financial penalties

  1. At present, obligations in the Companies Act 2006 relating to the functions of the Registrar are enforced primarily through the criminal justice system. The exception to this is the accounts late filing civil financial penalty.
  2. This Act reforms the role and powers of Companies House. As part of these reforms the associated sanctions are improved by amending existing criminal offences, creating new criminal offences, and taking a power to create a new civil penalties regime. This allows the Registrar to impose a civil penalty directly, rather than pursuing criminal prosecution through the courts, where that is a more appropriate use of resources.
  3. This section inserts a new section 1132A (Power to make provision for financial penalties) into the Companies Act 2006. This new section confers a power on the Registrar to impose a civil financial penalty on a person if satisfied, beyond reasonable doubt, that they have engaged in conduct amounting to a "relevant offence" under this Act.
  4. Subsection (2) of section 1132A states that a "relevant offence under this Act" means any offence under the Companies Act 2006 (and regulations made under that Act) other than an offence under a provision contained in: part 12 (company secretaries), part 13 (resolutions and meetings) and part 16 (audit).
  5. Subsection (3) of section 1132A states the regulations may include provision about the procedure to be followed in imposing penalties, the amount of penalties, for the imposition of interest or additional penalties for late payment, conferring rights of appeal against penalties and about the enforcement of penalties.
  6. Subsection (4) of section 1132A states the maximum penalty is £10,000.
  7. Subsection (5) of section 1132A states a person cannot have a financial penalty imposed in respect of conduct amounting to an offence if:
    1. proceedings have been brought against the person for that offence in respect of that conduct and the proceedings are ongoing, or
    2. they have already been convicted of an offence for that conduct.
  8. Subsection (5) of section 1132A also states no proceedings may be brought or continued against a person in respect of conduct amounting to an offence if they have been given a financial penalty for that conduct. This means a person can only be given a financial penalty or be convicted of an offence for the same conduct, not both. To preserve the ability of prosecutors to prosecute egregious cases, a financial penalty can’t be given if criminal proceedings have been brought for the same conduct and are ongoing.
  9. Subsection (6) of section 1132A provides that amounts recovered by the Registrar under the regulations are to be paid into the Consolidated Fund, and subsection (7) provides that the regulations under section 1132A are subject to the affirmative resolution procedure.

Section 105: Registered office: rectification of register

  1. This section amends section 1097A of the Companies Act 2006 (rectification of register relating to a company’s registered office). This section contains a regulation-making power which allows the secondary legislation to be made permitting the Registrar to change a company’s registered office on application. Section 105(2) amends subsection (1) of section 1097A to expand the regulation-making power, allowing provision to be made which permits the Registrar to change the address of a company’s registered office, both on application and on her own motion, if not satisfied that it is an appropriate address within the meaning of new section 86(2).
  2. Section 105(4) makes a number of changes to subsection (3) of section 1097A, which sets out what may be provided for in regulations made under the new subsection (1).
  3. A new paragraph (ba) is inserted after section 1097A(3)(b). The new paragraph provides that the Registrar may require the company or an applicant to provide information for the purposes of the Registrar making a decision about anything under the regulations.
  4. Paragraph (c) of section 1097A(3) is amended to provide that the words "and of its outcome" are substituted by "or that the Registrar is considering the exercise of powers under the regulations".
  5. A new paragraph (ca) is inserted into section 1097A(3) to provide that regulations made under section 1097A (1) may include "the notice to be given of any decision under the regulations".
  6. Section 1097A(3)(e) is substituted. This new paragraph sets out that regulations may provide for how the Registrar is to determine whether a company’s registered office is at an appropriate address within the meaning of new section 86(2), including in particular the evidence, or descriptions of evidence, which the Registrar may rely on without making further enquiries, to be satisfied that an address is an appropriate address.
  7. Paragraph (f) of section 1097A(3) is substituted to set out that the regulations made under new section (1) may include provision for the referral by the Registrar of any question for determination by the court.
  8. Paragraph (h) of section 1097A(3) is amended to provide that, where the Registrar nominates a default address to be the company’s registered office, the default address need not be an appropriate address within the meaning of new section 86(2).
  9. A new paragraph (ha) is inserted after paragraph (h) and provides that regulations may include the period of time for which a company is permitted to have its address at a default address.
  10. Finally, section 1097A(3)(i) is substituted. The new paragraph (i) now sets out that regulations may specify when the change of address takes effect, and the consequences of registration of the change, including provision similar to section 87(2) of the Companies Act 2006, which sets out that documents may continue to be served to a previously registered address for a period of up to 14 days after the change of address has taken effect.
  11. Section 105(5) removes subsection (4) from section 1097A. Section 105(6) inserts a new subsection (4A) into section 1097A. New subsection (4A) sets out that provision made by virtue of new subsection (3)(ha) may include provision to create summary offences punishable with a fine (paragraph (a)); provision for the Registrar to strike a company’s name off the register if the company does not change its address from the default address (paragraph (b)(i)); and provision for the restoration of a company, in prescribed circumstances, on application made to the Registrar or as a result of a court order.
  12. Section 105(6) also inserts a new subsection (4B) into section 1097A. This provides that the provision that may be made by virtue of subsection (4A) includes provision applying, or writing out, with or without modifications, any provision made by section 1000 or Chapter 3 of Part 31 of the Companies Act 2006. The effect of this would be that any strike off of a company’s name under new subsection (4A)(b)(i) would be consistent (aside from any necessary modifications) with strike-off in other circumstances. Finally, section 105(6) inserts new subsection (4C) which provides that section 1097A regulations may confer discretion on the Registrar.
  13. Section 105(7) substitutes subsection (6) of section 1097A. The new subsection (6) sets out that provisions made by regulations under new section 1097A(1) must include a right of appeal to the court against any decision to change the address of a company’s registered office.
  14. New subsection (6A) is inserted into section 1097A and sets out that if regulations enable a person to apply for a company’s registered office to be changed, they must also include a right for the applicant to appeal to the court if the application is refused.

Section 106: Rectification of register: service addresses

  1. This section inserts new section 1097B into the Companies Act 2006, which confers upon the Secretary of State a regulation-making power to enable the Registrar to change a relevant person’s registered service address where there is evidence to suggest that the address is not valid. The Registrar may act of their own motion or on the basis of an application by a third party. It is based on section 1097A, which makes similar provision in relation to company’s registered office. For the purposes of section 1097B, a ‘relevant person’ is a director, secretary, joint secretary, registrable person or registrable legal entity in all cases of a company that is not an overseas company.
  2. This section also makes consequential amendments to section 1087 by including a reference to section 1097B and service addresses.

Section 107: Rectification of register: principal office addresses

  1. This section inserts new section 1097C into the Companies Act 2006, which confers upon the Secretary of State a regulation-making power to enable the Registrar to change a relevant person’s principal office address where there is evidence to suggest that the address is not in fact their principal office. The Registrar may act on her own motion or on the basis of an application by a third party. It is based on section 1097A of the Companies Act 2006, which makes similar provision in relation to a company’s registered office. For the purposes of section 1097B, a "relevant person" is a director, secretary, joint secretary, registrable person or registrable legal entity in all cases of a company that is not an overseas company.
  2. This section also makes amendments to section 1087 by including a reference to section 1097C and principal office addresses, ensuring that any application or other document delivered under regulations made under new section 1097C are not made available by the Registrar for public inspection.

Section 108: Service of documents on people with significant control

  1. This section amends section 1140 of the Companies Act 2006 by allowing documents to be served on those with significant control over a company at the registered address that appears for the person on the register.

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