Register of Overseas Entities and other Companies House reforms

Register of Overseas Entities and other Companies House reforms

Jason Appel

Virtual CFO: Property and Construction

Tuesday June 28, 2022
Insights

Jason Appel

Virtual CFO: Property and Construction

Tuesday June 28, 2022
Insights

On 15 March 2022, the Economic Crime (Transparency and Enforcement) Bill received royal assent and became an Act. This signals changes ahead for Companies House and for organisations and agents who use its services.

Register of Overseas Entities

Overseas entities that own UK land will be required to declare their beneficial owners or managing officers. Entities who don’t register with Companies House in this way will be unable to buy, sell, transfer or lease land, or create a charge against the land in the UK. They may also face criminal and civil sanctions, including financial penalties.

When the Register of Overseas Entities is launched, overseas entities who already own land in the UK will be given six months to register. Any new purchasers will need to register from the day the register comes into effect.

Companies House will issue an overseas entity ID once the overseas entity has registered and provided all necessary information. Whenever the overseas entity buys, sells, transfers, leases or charges land in the UK, this ID will to be provided to the relevant UK land registry. The overseas entity will need to update its information yearly.

The names and beneficial owners of entities on the register will be available publicly via the Companies House website.

In late April, Companies House said that it would ‘soon be writing to all overseas entities captured by the Act who own land in England, Wales and Scotland to make sure they know about their new responsibilities. The launch date for the new register will be confirmed once the secondary legislation is laid.’ Detailed guidance is due to be published by the Government after that.

In June, an article from the House of Commons Library confirmed: ‘A lot of work needs to be done to set up the register. This includes … secondary legislation to describe exactly how it will work … The Government has not committed to a deadline, saying it will be operational “as soon as possible”.’

Wider corporate transparency measures

In February 2022, in advance of the Economic Crime Bill, a Government white paper set out 58 corporate transparency reforms across nine categories:

  1. Registrar’s powers
  2. Company names
  3. Identity verification
  4. Corporate directors
  5. Third party agents
  6. Data sharing
  7. Privacy
  8. Transparency of ownership
  9. Financial information

Under these reforms:

  • Anyone setting up, running, owning or controlling a company in the UK – including all directors and people with significant control (PSCs) – will have to verify their identity with Companies House
  • Companies House will have the power to challenge suspicious information
  • The quality of information provided to Companies House will be improved
  • Company directors will be better able to protect personal information published by Companies House

There will be changes to filing processes, including:

  • Limiting the number of times a company can shorten its accounting reference period
  • Requiring micro-entities to file their profit & loss account
  • Requiring small companies to file their profit & loss account and directors’ report; the option to file abridged (‘filleted’) accounts will be removed
  • Requiring dormant companies to file an eligibility statement

As with the Register of Overseas Entities, we await secondary legislation and the announcement of a start date for these measures. If they might affect your company, our business services specialists would be happy to discuss the changes with you. Please get in touch with your usual BKL Advance contact or use our enquiry form.

Jason Appel

Jason Appel

Virtual CFO: Property and Construction

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