New transparency rules to keep companies squeaky clean

Company directors, people with significant control of a company, or anyone who files on behalf of a company, must ensure they comply with new transparency rules from March 2024. 

Greater scrutiny of information lies at the heart of the new legislation, which is designed to plug potential loopholes that may have been exploited for the purposes of economic crime.  It strengthens the powers of law enforcement agencies, makes it easier to prosecute corporates for certain financial crimes, and introduces a new offence of ‘failure to prevent fraud’ for larger organisations.

Changes include new requirements to provide additional shareholder information and restrictions on the use of corporate directors.  Limited partnerships will need to file through authorised agents, and they’ll need to file more information than currently.

Called the Economic Crime and Corporate Transparency Act 2023, the Act amends the Companies Act 2006 and succeeds the previously fast-tracked Economic Crime (Transparency and Enforcement) Act 2022 which was drawn up in response to Russia’s invasion of Ukraine and saw the introduction of the Register of Overseas Entities.

It means that from March 2024, UK-registered companies will face:

  • stronger checks on company names
  • new rules for registered office addresses and a requirement to provide a registered email address
  • a requirement to confirm activities are lawful on incorporation and each year after

Companies House will have greater powers to challenge information that is provided and will be using data matching to identify and remove inaccurate information from the register.  It will also share data with other government departments and law enforcement agencies, who themselves will have greater powers to seize, freeze and recover crypto assets.

While the Act places additional reporting requirements on companies, the new digital processes will do away with some old paper-based requirements.  Companies will no longer be required to maintain internal registers of directors and their addresses, secretaries and people with significant control (PSCs). This information will be filed directly with Companies House and maintained on a central public record.

The Act includes enhanced powers to verify identities of company directors and measures are expected to be introduced later in 2024.  Anyone setting up, running, owning or controlling a company in the UK will need to verify their identity and this will apply to new and existing company directors, to PSC’s, and relevant officers of a registerable relevant legal entity.

It will be a criminal offence for an individual to act as a director while their identity is unverified, and the company will be committing a criminal offence by allowing an unverified director to act.

The changes affect companies across the board and directors will need to keep an eye out to be sure they are complying from March 2024 onwards.  We don’t have a definitive timetable yet, so it will require a waiting watch. The direction of travel continues towards greater transparency, so that law enforcement agencies can more easily identify and act on suspicions over sources of wealth and funding, and to tackle potential tax evasion or fraud.

According to the Government, fraud accounts for more than 40% of all crime in England and Wales and the new Act introduces two major changes.

It has previously been hard to hold a corporate organisation criminally liable where an individual could not be identified as having the ‘directing mind and will’ at the time of the offence.  Now, a ‘senior manager’ test will expand the range of individuals to which liability can be attributed, making it easier for prosecutors to pursue corporates for a ‘relevant offence’.  These include money laundering offences, fraud, false accounting, tax evasion, bribery, and breaches of sanctions regulations.

Also introduced by the Act is criminal liability attributed to an organisation for a failure to protect against fraud, whether by an employee, agent, subsidiary undertaking, or a person performing services on behalf of the company.  This offence of failure to prevent fraud will be limited to so-called larger organisations, which meet two out of three defining criteria, being more than 250 employees; over £36 million turnover; or assets exceeding £18 million.

Guidance on the necessary procedures for ‘failure to prevent’ is expected soon, and larger organisations will need to review risk assessments and their detection and prevention measures once this has been published.

This guidance is likely to reflect earlier ‘failure to prevent’ offences that were set out in the UK Bribery Act 2010 and the UK Criminal Finances Act 2017, which were designed to tackle bribery and facilitation of tax evasion offences. So, the good news is that it is unlikely to involve designing compliance procedures from scratch, but fraud can be notoriously difficult to pin down, so it may yet present a stiff compliance challenge.

To discuss this or any other related matter, please call James, start a live chat or email us at

*This is not legal advice; it is intended to provide information of general interest about current legal issues.


James Lamont

Partner, Head of Commercial & Corporate

Legal Expertise: James has specialised in corporate and company commercial law for twenty years advising on new business ventures, legal structures, sales & acquisitions, mergers,...

James Lamont-Head of Commercial & Corporate

Partner, Head of Commercial & Corporate

James Lamont

Legal Expertise:

James has specialised in corporate and company commercial law for twenty years advising on new business ventures, legal structures, sales & acquisitions, mergers, buy-outs, corporate investments and a wide range of commercial contracts.

He represents a wide variety of clients across various sectors including in media & advertising, branding & web design, engineering & manufacturing, transport & logistics, technology & software solutions, professional services, property investment, the drinks & fashion industries and sports & entertainment. He is known for his commitment to his clients, sound business sense and calm legal authority.

Recent transactions include the sale of a number of technology and IT businesses, acquisition of a transport and logistics business (aviation), acquisition of an event management company, acquisition of a business solutions provider and subsequent joint venture with a leading international management consultancy firm, sale of an energy technology business, restructuring of a property investment portfolio and the sale of a technology, media and communications group.


James was educated at Eton College and Bristol University. He then trained at the College of Law before qualifying with Cumberland Ellis LLP an established London firm and joining their commercial department in 2000, becoming a partner there in 2006. James joined the partnership at Hart Brown in October 2010 and now heads up the Commercial & Corporate Department.

Other business related positions include (i) member of the Havaianas Club (an exclusive entrepreneurs business club) (ii) involvement in Euro juris and related international legal networks and (iii) trustee of the Betty Riseley Trust and The Woodspring Trust.

Past times and hobbies include a fair amount of sport, particularly tennis and cricket and hiking, sailing, surfing or skiing whenever the chance arises. More sedate interests include reading (preferably historical novels), the occasional game of chess or poker and, hiking in the South Downs or days on the water in Chichester Harbour.