Companies House Announce New Application Checks
The United Nations imposes financial sanctions on individuals and corporate bodies because of the nature of their activities, such as genocide and terrorism. These individuals and corporate bodies are called ‘designated persons’ (DPs). The UN sanctions are included in EU and UK law to stop DPs using “economic resources”, which include companies, for those types of activities.
Companies House has announced that with effect from 12th December 2018 they will check the details of proposed directors, secretaries, members, and people with significant control for any matches to a designated person in an application to register a UK company or LLP.
They will look at; the person’s full name, address, date of birth, nationality and occupation, and the main activities of the company either from the accounts or the SIC code.
If Companies House has reason to believe these details match those of a DP, then the registration will be rejected for that reason. It will be possible to reapply with evidence proving that there is no DP connection.
This is different to the due diligence checks that we have to perform with every new incorporation order, under the Money Laundering Regulations 2017. As a company service provider, we are regulated by HMRC and directed, using an approach based on the risk to our business, to check the validity of the identity of all our clients and the directors and beneficial owners of the companies we form. Companies House are not obliged to carry out the same checks as it is assumed to not be “carrying on business” but operates instead under statute. We maintain that if the UK government is serious over its intent to combat fraud and terrorist financing, this argument is illogical at best and reckless at worst.
Changes to Companies House Systems and Forms in the event of
a no-deal Exit on the 29th March 2019.
Companies House has now released notes of changes to its systems and forms that will be implemented on the 29th March, ONLY in the event of a no-deal Brexit.
1. Corporate officers
From exit day, the references to and requirements for ‘EEA’ & ‘Non-EEA’ corporate officers will be modified and replaced by ‘UK registered limited companies’ and ‘Other corporate bodies and firms’:
- A company or LLP which has a limited company incorporated and registered in the UK as a corporate officer will have to provide that corporate officer’s name, registered or principal office address and its registration number.
- A company or LLP which has any other entity as a corporate officer will have to provide that corporate officer’s name, registered or principal office address, the legal form of the company or firm and the law by which it is governed and (if applicable) the register in which it is entered and its registration number.
2. Confirmation statement
Minor modification to references to UK regulated markets in sections C1 & C3 of form CS01.
3. Cross-border mergers
Cross-border mergers involving UK companies will no longer be able to take place under the EU Directive 2005/56/EC - cross-border mergers of limited liability companies.
As the UK will no longer be part of the EEA, the reporting requirements for overseas companies which open a UK establishment will become the same regardless of whether their ‘home’ country is inside or outside the EEA.
The draft regulations (which are still to be debated) and a draft explanatory memorandum setting out the legislative changes for all of the above can be found here:
5. Societas Europea (SE)
From the day of exit any SE registered in the UK will be automatically converted to a United Kingdom Societas (UK Societas). No SEs will be formed, transferred into or outside of or registered in the UK after exit day. Any converted SE can either remain as a UK Societas, converted to a PLC or wound up.
The regulations and explanatory memorandum setting out the legislative changes for SEs can be found here:Return to News