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In a significant step forward in the UK’s fight against economic crime, the Economic Crime and Corporate Transparency Act 2023 (ECCTA 2023) has introduced milestone changes to the business world.
Our blog on Company House Changes provides an overview of the noteworthy changes brought about by the act.
Since the ECCTA 2023 received Royal Assent in October last year, regulations around financial penalties and Companies House fees have been published and laid before Parliament, which further sets out how corporate crime is identified, penalised, and deterred.
In the blog below, our Corporate Law experts demystify the key changes and implications that business owners should be aware of.
On 19 February 2024, the draft Economic Crime and Corporate Transparency Act 2023 (Financial Penalty) Regulations 2024 were published and laid before Parliament.
These draft regulations empower the Registrar of Companies to impose financial penalties on those found guilty of economic misconduct amounting to relevant offences under section 1132A of the Companies Act 2006, as amended by the ECCTA 2023.
It is anticipated that this will provide a more direct and potentially more expedient recourse to penalise economic crime than criminal prosecution, which has traditionally been relied upon.
The key features of the regulations for businesses to be aware of are as follows:
On 19 February 2024, the Registrar of Companies (Fees) (Amendment) Regulations 2024 and the Registrar of Companies (Fees) (Register of Overseas Entities) Regulations 2024 were published and laid before Parliament.
Alongside the introduction of financial penalties, the ECCTA 2023 expands the Registrar’s fee-raising powers to ensure that regulatory activities (investigation and enforcement) are adequately funded.
The key fee amendments for businesses to be aware of are as follows:
The regulations also address the fees payable for functions relating to the register of overseas entities, increasing the costs associated with compliance and registration. This is part of broader efforts to enhance the transparency of foreign entities operating within the UK’s economic landscape.
The fees are due to increase on 1 May 2024, as outlined by Companies House.
By bolstering the mechanisms by which economic crime is penalised, the ECCTA 2023 and its associated regulations mark a significant shift towards enhancing corporate transparency and accountability to tackle economic misconduct.
For businesses, this means navigating a regulatory landscape where compliance is essential, not only to avoid exposure to legal difficulties but also to contribute to a more transparent market environment.
It is a critical time to adapt to emerging regulatory requirements and remain informed about the evolving legal context. There is a clear need to reevaluate compliance strategies, budget for increased costs for registration and filings, and ensure that all operations are aligned with the new regulatory framework and the now-heightened standards expected of corporate behaviour.
As we navigate these developments, the overall goal remains to foster a business environment that is both transparent and nurturing of economic growth.
By understanding these changes and their implications, businesses can better position themselves for success against the backdrop of an increasingly regulated environment
If you would like to know more about how our Corporate Solicitors can provide legal support for your business at this time, please contact us on: