Significant changes are coming to UK company law on 4 March 2024 under the Economic Crime and Corporate Transparency Act 2023 (the “Act”). The Act aims to crackdown on economic crime such as bribery, corruption, and fraud whilst also supporting economic growth. The Act will implement a number of changes at Companies House resulting in greater checks on companies including their names, identification and the information they provide. The Act enables Companies House “enhanced abilities to verify the identities of company directors, remove fraudulent organisations from the company register and share information with criminal investigation agencies”.
The other significant change is that a “senior manager” can commit an offence under the Act making a company criminally liable. A “senior manager” is an individual who plays a significant role in either; (1) the making of decisions about how the whole or a substantial part of the activities of a company are managed or organised and (2); or the actual managing or organising of the whole or a substantial part of those activities.
The scope for criminal liability, already wider than previous legislation will also extend to crimes committed by ”associated persons” which include employees, agents, subsidiaries, or any other person performing services ‘for or on behalf’ of the company where they do not have preventative measures in place.
Many law enforcement agencies have welcomed the changes with the hope that it will make corporate prosecutions easier and will lower crime by acting as a deterrent. You can read more about the Act here.
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