Posted by: Stuart Morgan
- Head of Policy Development at Companies House
You’ll have seen recently that
the Economic Crime and Corporate Transparency (ECCT)
Bill was introduced to
Parliament in September. This is a significant step forward in
allowing us to make fundamental reforms to the legal framework
within which Companies House operates, but the ECCT Bill is just
at the start of its journey.
To become an Act, the Bill must be
passed by the Commons and the Lords (in either order) and receive
Royal Assent. It can be passed with or without amendment, but the
Commons and Lords must both agree the text. The Bill can also
only be changed by formal
amendment.
The Bill is likely to achieve Royal
Assent in the spring of 2023, but the passage through Parliament
is a winding path of debate and examination where proposals for
amendments can be made at several
stages.
How the Bill will become law
Bills may start in either the House of
Lords or the House of Commons, but most start in the House of
Commons.
-
First reading – the title of the
Bill is read in the House with no debate.
-
Second reading – a general debate on
the Bill in the House, opened and closed by the Minister, with
questions at the end.
-
Committee stage – a detailed
examination of the Bill by Committee. Amendments can be made by
vote. This stage can last weeks.
-
Report stage – a debate in the House
of the Bill plus amendments.
-
Third reading – a final debate on
the Bill in the House, immediately after the report
stage.
-
The Bill goes to either the House of
Lords or the House of Commons and the process is
repeated.
-
Consideration of amendments – the
second House’s amendments are considered, and the Bill may go
back and forth until both Houses agree on the
Bill.
-
Royal assent – the Bill must have
Royal Assent before it can become an Act of Parliament (law).
The Act usually comes into force from midnight at the start of
the day of Royal Assent.
The Bill is currently at
the second reading stage
in the House of Commons (as of 13 October 2022) so there are a
few more stages to go before the final wording is agreed, and the
Bill becomes an Act. In the meantime, we are working hard behind
the scenes to prepare for the changes that the Bill will
introduce.
How the Bill will affect Companies House
The Bill will reform the role of
Companies House and improve the transparency of UK companies and
other legal entities. The changes
include:
-
introducing identity
verification for people who register companies or file with
Companies House; this will improve the accuracy of our data and
support business decisions and law enforcement
investigations
-
broadening our powers so that we
become a more active gatekeeper over company creation and a
source of more reliable data; Companies House will be given new
powers to check, remove or decline
information
-
improving the financial information
on the register so that it’s more reliable, complete and
accurate, reflects the latest advancements in technology, and
enables better business decisions
-
strengthening enforcement powers and
better cross-checking of data with other public and private sector bodies; we’ll
be able to proactively share information with law enforcement
bodies where they have evidence of unusual filings or
suspicious behaviourenhancing
the protection of personal information provided to Companies
House to protect individuals from fraud and other
harm
Our Companies House Chief Executive
Louise Smyth recently said:
We welcome the measures outlined in
this Bill, which represent the most significant and far-reaching
changes to the UK’s company register in over 170 years of history
and will enable us to play a much stronger role in making the UK
a great place to do business.
If agreed, these changes will allow us
to actively improve and maintain the integrity of the register
like never before, inspire greater trust in our data, crack down
on economic crime, and further drive confidence in the UK
economy.
While the scale and scope of these
changes should not be underestimated, the work already done
through our wide-ranging and ongoing transformation programme
puts us in a strong position to implement them as quickly and
efficiently as possible.
Change will not happen overnight, but
we hope to deliver some of the measures as early as possible
following Royal Assent with others being implemented over
time.
