This consolidated corporate update summarises the major developments in UK corporate law and regulation which have occurred over the last six months and which will be of relevance to UK listed companies.

On the horizon: the most material developments expected in the next 6-12 months

Reform of Companies House – following the Economic Crime and Corporate Transparency Act 2023 receiving Royal Assent, Companies House's new powers are to be brought into force in "early 2024" – see item A1 below.

Reform of the listing regime – the FCA has published in draft most of the new UK Listing Rules for normal commercial companies, to implement a radical restructuring of the UK listing regime expected to come into force in the second half of 2024 – see item D1 below.

Revised UK Corporate Governance Code – the FRC is expected to publish a revised Governance Code in January 2024, which will apply to financial years beginning on or after 1 January 2025 – see item G1 below.

A. Company law

1. Radical reforms to Companies House and corporate liability for economic crimes

Overview of the reforms introduced by the ECCTA

The Economic Crime and Corporate Transparency Act 2023 (ECCTA) received Royal Assent on 26 October 2023. The ECCTA contains, among other things, amendments to the Companies Act 2006 (CA 2006) to facilitate the transformation of Companies House. Its provisions will come into force at a later date to give companies, and Companies House, the chance to prepare. It will also introduce a new corporate offence of failure to prevent fraud.

The passing of the ECCTA follows consultations in 2019 and 2020, a white paper containing the government's final plans for reform published in February 2022 and the laying of the draft bill in September 2022. A number of material amendments were made to the bill as it moved through the parliamentary process.

We have released a series of snapshots covering the different aspects of the reforms to help companies prepare for the significant changes ahead:

  • The transformation of Companies House – The ECCTA will result in the biggest change in the role of Companies House since it was created in 1844, turning it from a largely passive recipient of information to a much more active gatekeeper. Under the new Companies Act provisions inserted by the ECCTA, Companies House will be given the power to query any filings, to request further evidence and/or to reject any filings, and to remove material from the register more swiftly. It will also be able to require all information to be filed electronically. For more information on the implications for companies of the transformation of Companies House, watch our webinar.
  • Identity verification – Identity verification requirements will be introduced for all new and existing company directors (and equivalents for other entities), people with significant control (PSCs) and those filing information with Companies House. UK company formation agents that register with Companies House will be able to conduct these identity checks. Directors and PSCs who do not verify their ID will commit a criminal offence and/or incur a civil penalty. Companies that have an unverified director will also commit an offence.
  • Miscellaneous company administration changes – The ECCTA makes a number of changes to the administration of companies, designed to reduce compliance burdens and improve the quality of the information on the register.
  • Limited partnerships – The ECCTA also contains provisions introducing registration and transparency requirements for limited partnerships. The changes follow reforms proposed in April 2018 by the government to UK limited partnership law to strengthen the legal framework and limit the risk of limited partnerships being used for illicit activities.
  • Corporate criminal liability for economic crimes – The government has used the ECCTA to introduce a new strict liability corporate offence of failure to prevent fraud where a company does not have reasonable fraud prevention procedures in place. The ECCTA also amends the so-called 'identification doctrine' (where companies can be held criminally liable for the acts of their officers or employees if they represent the company's 'directing mind and will' such that their actions can be attributed to the company concerned) for economic crimes. For more information on what companies can do to prepare for the new criminal offences, watch our webinar.

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