The Act introduces new statutory objectives for the registrar to improve the accuracy and integrity of information on the register, and also gives the registrar new powers (and enhances existing ones) to support those objectives. Under the new powers, the registrar will be able to reject and query filings and will also be able to remove material more quickly if it impacts on the integrity of the register.
The objectives, combined with the registrar’s new powers, are intended to fundamentally change the statutory role of Companies House from a passive recipient of information to a more active gatekeeper of the data on the register.
The registrar’s objectives
The Act introduces the following statutory objectives for the registrar to promote and maintain the integrity of the register (new section 1081A Companies Act 2006):
- Objective 1: To ensure that any person required to deliver documents to the registrar does so, and that the requirements relating to proper delivery are complied with.
- Objective 2: To ensure that information contained in the register is accurate and that the register contains everything it ought to contain.
- Objective 3: To ensure that records kept by the registrar do not create a false or misleading impression to members of the public.
- Objective 4: To prevent companies and others from carrying out unlawful activities or facilitating the carrying out by others of unlawful activities.
The Act gives the registrar additional powers in support of these objectives and to help Companies House bear down on those who abuse corporate structures to commit economic crime.
New powers to promote the integrity of the register
Key powers granted to the registrar to assist in improving the accuracy and integrity of the register are set out below.
Power to reject and query filings
The Act gives the registrar the power to reject and query new filings and to query information already on the register, where information is identified as potentially fraudulent, suspicious or may otherwise impact on the integrity of the register (e.g. it undermines the quality of information or enables individuals to pursue illicit activity). The new powers will mean that the registrar is no longer obliged to accept documents for registration where there is reason to query the information provided.
Where a query is raised by the registrar pre-registration, the filing will be rejected, and a reason provided. The entity will be able to re-submit the filing, ensuring that the query has been addressed, and supplying any required information.
In relation to existing filings, the registrar may request additional information to determine whether a document has been properly delivered or whether it is a document that must be registered. The relevant entity will be given a specified time period in which to respond, and this may be extended at the registrar’s discretion. A request for additional information may be instigated by a third party or under the registrar’s own initiative.
The registrar will also have the power to request additional information if it considers that a filing is inconsistent with other information already on the register.
Failure to respond to a notice from the registrar will be an offence.
Power to remove material from the register
The Act provides the registrar with greater powers to remove information from the register if it is inaccurate, incomplete, false or fraudulent.
In relation to this power, implementing regulations – The Registrar (Annotation, Removal and Disclosure Restrictions) Regulations 2024 (the Regulations) – were published on 18 January 2024 and are expected to come into force by 4 March 2024.
The Regulations (which apply to companies and limited liability partnerships) provide a mechanism for third parties to apply to Companies House to have material removed from the public register. The applicant would need to explain why the material should be removed, and if removing it would have legal consequences, the applicant would need to explain why their interest outweighs the interest of anyone who may wish to inspect the material.
The registrar’s powers to remove material from the register acting under its own initiative, are set out in the Act itself. The process for removing the material (including the registrar giving notice to the company concerned) and the time period for objecting to any removal, is set out in the Regulations.
The Regulations also grant to the registrar a broad power to annotate the register where it considers that the registered information is misleading or confusing.
The Act also gives the registrar the following additional powers:
- to require businesses to obtain specified information about a customer (or prospective customer) and to report to the registrar any discrepancies between that information and information already on the register;
- to analyse information for the purposes of crime detection, using information on the register and other information available to it; and
- to impose financial penalties for breaches of the Companies Act 2006 directly, as an alternative to pursuing criminal prosecution.
The new powers to remove material from the register will be welcome for anyone wanting to remove incorrect or unnecessary information from the public register at Companies House as this has been very difficult (if not impossible) to do under the current legislation.
Once the relevant provisions are in force, companies receiving queries and requests for additional information from Companies House would be well advised to respond in a timely fashion. Failure to do so without reasonable excuse will constitute an offence punishable by imprisonment or a fine (or both).
The Economic Crime and Corporate Transparency Act 2023
The Registrar (Annotation, Removal and Disclosure Restrictions) Regulations 2024
Government Factsheet: The role and powers of the registrar of companies