Changes To UK Company Law: What LLCs and LPs Need to Know?

In this article, we will discuss the significant changes and requirements that mainly affect Limited Liability Companies (LLCs) and Limited Partnerships (LPs).

Requirement to provide appropriate company information

Under the new law, all companies, including LLCs and LPs, are required to provide accurate and up-to-date company information to Companies House. This includes the following:

• Registered office and email address
• Statement confirming that the intended future activities of the company are lawful
• One-off full list of shareholders’ or members’ names
• Information on persons with significant control (PSCs)

Registered office and email address

All companies are required by law to maintain an ‘appropriate’ registered office address that meets certain criteria:

• The documents sent to this address will be received by an authorized individual representing the company;
• The delivery of documents can be acknowledged.

As a result, PO boxes are no longer acceptable for this purpose. Failure to adhere to this regulation may result in penalties, possibly even strike-offs by Companies House.

Companies must also provide a registered email address to Companies House for communication purposes.

• New companies established from March 4, 2024, are mandated to provide a registered email address during the incorporation process.
• Existing companies (established before March 4, 2024), need to include email addresses in the Confirmation Statement starting from March 5, 2024.

Statement of lawful intended future activities

As per the new legal mandate, UK companies, including LLCs and LPs are required to affirm the statement of lawful purposes. This entails declaring that the company’s future activities will be lawful.

• For new companies established from 4th March 2024: Include the statement of lawful purposes during the incorporation process.
• For existing companies: Include the statement of lawful purposes when submitting the annual Confirmation Statement from 5th March 2024 onwards.

One-off full list of shareholders’ or members’ names

Companies are required to record the complete names of individual shareholders (or full names of corporate members and entities) in the company’s registers.

Additionally, a one-off full list of shareholders’ or members’ names should be provided on the confirmation statement dated March 5, 2024.

Shareholders and members are obligated to furnish this information to the company within two months of joining or within two months of any changes to their registered details.

Failure to comply without a valid excuse constitutes an offense.

Information on PSCs

The government is requesting additional information from companies seeking an exemption from the obligation to disclose their persons with significant control (PSCs).

• For companies planning to seek an exemption:
  • Provide details of their persons with significant control (PSCs); and
  • Clearly state the reasons for meeting the exemption criteria.
• For companies already granted an exemption:
  • Include the PSC information in the confirmation statement.
• For Relevant Legal Entities (RLE) identified as PSCs:
  • State the conditions that permit their classification as persons with significant control.

The introduction of identify verification requirement

All individuals involved in registering, running, owning, or controlling a company or incorporated partnership in the UK are required to verify identity to confirm their authenticity.

These individuals may include:

• Directors
• Persons with significant control (PSCs)
• Relevant officers of relevant legal entities (RLEs)
• Members of LLPs
• Individuals who file to Companies House on behalf of a company

New directors must undergo identity verification before submitting a company formation application to the Registrar. Failure to verify PSCs shortly after company incorporation constitutes a criminal offense.

Post-incorporation, directors should promptly verify their identity before their appointment is reported to the Registrar.
Individual PSCs have 14 days after registration with the

Registrar to verify their identity, while Relevant Legal Entities have 28 days. These entities must disclose the name of their verified relevant officer.

New restriction on appointment of corporate directors

The Act mandates that corporate directors in the UK must be UK corporate entities with a ‘legal personality. Additionally, all directors of these entities must be individuals who have undergone thorough identity verification requirements before the appointment.

This rule applies to both new and existing companies looking to appoint another entity as a director. While the specific effective date for this restriction remains unspecified, companies currently using corporate directors will have a 12-month grace period to comply with the new requirements once the law is enforced.

The removal of certain statutory registers

Companies are no longer required to maintain certain statutory registers at their registered office address, such as

• The register of directors
• The register of director’s residential addresses
• The register of company secretaries, and
• The register of persons with significant control

These registers will now be stored at Companies House. However, companies must continue to maintain internal statutory registers, like the register of members.

Protection of personal data and information

The legislation aims to safeguard personal data by allowing individuals to shield certain information from past filings on the public register. This protection applies when an individual submits a request to safeguard their data and information.

The data covered include:

• Home or residential addresses, unless already noted elsewhere, like a registered office address.
• Day of birth on records filed before October 10, 2015 (only the month and year of birth have been publicly visible since that date)
• Personal signatures
• Occupation details

Audit exemption for qualified companies

Under the new regulation, audit exemption will be granted to specific UK companies or incorporated partnerships that meet certain criteria. These may encompass:

• Small companies and micro-entities
• Dormant companies
• Parent companies
• Subsidiaries

Companies seeking an audit exemption must provide an additional statement from their directors on the balance sheet, specifying the exemption being claimed and affirming the company’s eligibility for it.

Conclusion

In conclusion, the UK Companies Act 2024 introduces several changes that aim to enhance transparency and accountability in the UK business landscape.

Companies House will provide further guidance on these changes. It is essential for all companies, both new and existing, to stay informed and comply with the new guidelines to ensure compliance with the law and stay updated on any developments related to the Act.

For official information on the Act, please visit the Companies House website.

If you need assistance on how to comply with the new changes or have any queries about company formation in the UK, feel free to get in touch with our support team via service@bbcincorp.com.

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