With the Economic Crime and Corporate Transparency Act having received Royal Assent towards the end of 2023, 2024 is expected to be a year of reform for Companies House with the first of such reforms having taken place on 4 March. The latest changes include:

  • greater powers for Companies House to query information and request supporting evidence
  • stronger checks on company names
  • a ban on PO Boxes being used as registered office addresses
  • a requirement for all companies to supply a registered email address
  • a requirement on incorporation of a company to confirm that the formation is for a lawful purpose and to further confirm its intended future activities will be lawful on its annual confirmation statements
  • greater powers to tackle and remove factually inaccurate information
  • the ability to share data with other government departments and law enforcement agencies

Other significant changes expected this year include the implementation of identification checks for directors and persons of significant control and perhaps more controversial, the requirement for small and micro companies to file a copy of their profit and loss account with their accounts.

Historically, small and micro companies have the ability to ‘fillet’ out of their accounts the profit and loss account, which has provided many small businesses a significant degree of confidentiality when it comes to their turnover, profits, directors remuneration and dividends. Having this information publicly available may be of significant interest to customers, competitors and even employees. Had the original Bill been passed without amendment, the only way to have preserved this confidentially would have been to disincorporate into a partnership or sole proprietorship, who continue to maintain business confidentiality but with the loss of limited liability that a company provides, as well as a differing and perhaps unsuitable tax regime.

However, a significant change was made before the Bill was passed, and while small and micro companies will be required to file their profit and loss account in the future, the amendment gives Companies House power to determine whether this information is required to me made available for public inspection. How Companies House will use this provision is yet to be determined, but one possibility, like directors home addresses and dates of birth, is for this information be used for official purposes only and redacted from the public record. This approach would undoubtedly be welcomed by many business owners…watch this space!