In this post, we summarise the new Economic Crime and Corporate Transparency Bill (the Bill) which was published on 22 September 2022 and the significant reform proposed to the role of Companies House. The Bill proposes giving Companies House improved investigation and enforcement powers and makes changes to strengthen regulators’ powers to seize and detain cryptoassets. If granted, this legislation will represent the largest reform to Companies House in 170 years. The Bill also proposes expansions of the Serious Fraud Office’s (SFO) investigative powers (see article here).
What Companies House reforms are proposed under the Bill?
One of the key proposals is for Companies House to have a new power to check, remove, or decline information submitted to the register and will require UK companies to verify their identity with a primary identity document, such as a passport or driving licence. During this new identity verification process, the individual will be asked to take a photo of themselves, and this photo will then be compared for likeness with the primary identification document they have provided. These new powers will allow Companies House to verify who is behind UK businesses, which in turn, will help prevent companies being set up as fronts for criminal enterprise or money laundering.
Under current legislation, the registrar has to accept information submitted to Companies House if it is “properly delivered” and Companies House currently only have limited powers to correct or query information where there is a suspicion that something submitted is erroneous or fraudulent. However, the new Bill proposes giving Companies House greater investigation and enforcement powers, including the ability to cross-check and share data with both private and public sector entities and to report suspected criminal activity to law enforcement.
How does the Bill affect crypotoassets?
The Bill proposes making it quicker and easier for the policing of cryptoassets, with law enforcement agencies such as the National Crime Agency having new powers to seize, freeze and recover cryptoassets.