Economic Crime and Corporate Transparency Bill – An Update

Following our previous commentary on the Bill’s development, the House of Commons has made amendments to Parts 1 (Companies) and 2 (Partnerships) of the Bill. These amendments include:

1. Directors’ disqualification. Adding clauses to the Bill that allow a director to be disqualified for breaches of obligations under Part 1 of the Economic Crime (Transparency and Enforcement) Act 2022 e.g. Directors (or their equivalents) failing to register at Companies House within a certain time period following their appointment. This disqualification penalty would be on top of existing penalties already in the Bill e.g. criminal offences and potential civil liability.
2. Directors’ identity verification. the power to make regulations exempting directors from identity verification requirements has been removed.
3. Data sharing. Expanding the ability of the Secretary of State to make regulations giving Companies House more extensive information sharing powers e.g. with the police.
4. Partnership identity verification. If a Partnership has a corporate general partner, the registered officer of that corporate general partner will now be required to participate in the identity verification requirements, creating parity between Companies with corporate directors and Partnerships with a corporate general partner.
5. Meaning of LP. This has been amended to ensure consistency with other statutes and to clarify the relationship between being registered as an LP under the Limited Partnerships Act 1907 and deregistered an LP under the new section 26 of the Bill.
6. Removing LPs from index of names. Adding a new section requiring Companies House to remove an LP from the index of names as soon as practicable following dissolution or deregistration. Companies House must place a note on the register when a LP is removed and publish a notice in the Gazette in certain circumstances.
7. Notification of LP dissolution. Amending the Bill to require a general partner of an LP to notify Companies House within 14 days of becoming aware that an LP is dissolved.
8. Reporting. Introducing a requirement for the Secretary of State to report to Parliament on the operation and implementation of Parts 1 to 3 of the Bill, within 6 months of enactment.

No amendments have been made to Part 3 of the Bill (Register of overseas entities). In other words, there have been no amendments to the practical way a registrable entity should go about getting themselves registered.

As we have touched on in previous articles on the Bill, local authorities could consider having a ‘point person’ who can familiarise themselves with the new filing requirements, understand timetables and file the necessary information to avoid unnecessary holdups or challenges.

Sophie Alexander is a solicitor at Sharpe Pritchard LLP.

This article is for general awareness only and does not constitute legal or professional advice. The law may have changed since this page was first published. If you would like further advice and assistance in relation to any issue raised in this article, please contact us by telephone or email enquiries@sharpepritchard.co.uk

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This article is for general awareness only and does not constitute legal or professional advice. The law may have changed since this page was first published. If you would like further advice and assistance in relation to any issue raised in this article, please contact us by telephone or email enquiries@sharpepritchard.co.uk