Corporate Bulletin | June 2023
Company Law Reform Economic Crime and Corporate Transparency Bill Background
Summary
The Bill was published on 22 September 2022. It is the second part of a legislative package aimed at preventing abuse of UK corporate structures and tackling economic crime. It follows on from the Economic Crime (Transparency and Enforcement) Act 2022 which provides for the creation and maintenance of a register of overseas entities by Companies House and contains requirements for overseas entities owning UK property to apply for registration and provide information about their beneficial owners.
The principal features of the Bill include:
According to the UK government the Bill has 3 key objectives: • Prevent organised criminals, fraudsters, kleptocrats and terrorists from using companies and other corporate entities to abuse the UK’s open economy • Strengthen the UK's broader response to economic crime by giving law enforcement new powers to seize cryptoassets and enabling businesses in the financial sector to share information more effectively to prevent and detect economic crime • Support enterprise by enabling Companies House to deliver a better service to improve the reliability of its data which will help inform business transactions and lending decisions across the economy The effect of the Bill will be to amend and include new provisions in the Companies Act 2006 and related legislation.
• broader powers for the Registrar of Companies enabling it to become a more active gatekeeper over company creation and custodian of more reliable data concerning companies and other UK registered entities. The Bill creates a number of objectives for the Registrar with the underlying intention being the maintenance of the integrity of the registers kept at Companies House in relation to a particular company • enhanced investigative and enforcement powers to Companies House enabling cross-checking of data with other public and private sector bodies. The Bill intends to make it easier for businesses in regulated sectors to share customer information with each other for the purposes of preventing, investigating, and detecting economic crime • identity verification requirements for all new and existing registered company directors, People with Significant Control and those delivering documents to Companies House • greater protection to personal information provided to Companies House limiting opportunities for fraud • a new corporate criminal offence for failure to prevent fraud and false accounting offences committed by employees or agents (see below) • powers to quickly and more easily seize and recover cryptoassets.