The Economic Crime and Corporate Transparency Act, enacted in October 2023, is a continuation of the UK’s tighter approach to corporate transparency and economic crime
Key changes and opportunities
New Rules for Registered Offices
- Technical Compliance: The Act prohibits the use of PO Box addresses as registered offices for companies. Solicitors may consider reviewing their clients’ current registered office details to ensure compliance. This may involve working with clients to identify an appropriate physical address that reflects the company’s operational reality.
- Practical Considerations: Updating registered office details will require some planning, especially for entities that rely heavily on the anonymity of PO Box addresses for confidentiality or operational reasons. Solicitors may need to explore alternative solutions that comply with the Act while meeting the client’s business needs.
Mandatory Registered Email Address
- Compliance Strategy: The requirement to provide a registered email address to Companies House is aimed at improving the ease of communication and transparency. This email address will serve as a key point of contact but will not be publicly accessible. Solicitors must advise their clients on selecting an email address that is secure, regularly monitored, and reflects the company’s communication hierarchy.
- Operational Impact: The selection of a registered email address may require changes to internal policies and procedures regarding document management and communication. There may be data protection and cybersecurity considerations, and solicitors could offer guidance on best practices and compliance with relevant regulations.
‘Lawful Purpose’ Statement
- Legal Considerations: The introduction of a ‘lawful purpose’ statement for new incorporations and a similar affirmation for existing companies in their annual confirmation statements underscores the government’s commitment to corporate transparency. Solicitors must assess the legal ramifications of this requirement, ensuring that their clients understand the importance of accurately representing their business activities.
- Advisory Role: Providing counsel on the formulation of a ‘lawful purpose’ statement involves a deep understanding of the company’s operations, objectives, and industry regulations. Solicitors should prepare to assist clients in navigating potential ambiguities and challenges in defining their lawful purpose, particularly for businesses with complex or unconventional models.
Recent Posts
