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Overhaul of Companies House – Wider Powers of investigation

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Following on from our earlier article on the proposed introduction of Director Verification measures under the Economic Crime and Corporate Transparency Bill (“Bill”), which seeks to tackle economic crime and improve transparency over corporate entities, this article will provide an overview of the proposed wider powers of investigation that would be granted to Companies House under the Bill.

In its present role, Companies House plays an important, but passive, role as an accumulator of information and records. The proposed reforms would change this significantly, with the three Registrars of Companies becoming an active gatekeeper.

The first step of this transformation involves the establishment of four statutory objectives which are to be added to the Companies Act 2006, these are:

• To ensure that any person who is required to deliver a document to the registrar does so;
• To ensure that that documents delivered to the registrar are complete and contain accurate information;
• To minimise the risk of records kept by the registrar creating a misleading impression to the public; and
• To minimise the extent to which companies and others facilitate or carry out unlawful activities.

The achievement of the above objectives will be facilitated by the introduction of several new transparency measures; one of which is Director Verification, as well as wider powers of investigation.

Firstly, Companies House will be given the authority to require all information to be filed electronically. At present, electronic filing is actively encouraged, though it is optional. Such a power conferred by the Bill represents a modernisation of the administrative process.

Companies House will also be given the authority to probe filings that could lessen the reliability and accuracy of the register due to them seeming incorrect or suspicious. Such authority would also extend to enable additional evidence to be requested, as well as the capacity to reject filings were appropriate.

The above increase in power will be supplemented by enabling the registrars to remove material from the register faster and in a wider scope than is currently allowed.

It is clear that the proposed increased powers will allow Companies House to properly and more efficiently scrutinise company filings which should assist in achieving the statutory objectives which have been created.

Consequently, companies may need to take more care when filing documents. Rollits provide a Company Secretarial Service, for more information please get in touch.

This article is for general guidance only. It provides useful information in a concise form. Action should not be taken without obtaining specific legal advice.
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