Transcript: Economic Crime And Corporate Transparency Act 2023 Update

Transcript

Monika: Today we've got with us Joanne who will give us an update on economic crime and Corporate Transparency Act and so handing over to you Joanne.

Joanne: Thanks, Monika. So thank you all for joining this morning. Some of you may have been present on our previous update for the Economic Crime Corporate Transparency Act. We obviously we'll try not to repeat the, all of the information that was shared previously, but there are quite a few updates that we can share with you today and take you through some of the insights that we're seeing as we kind of go through the, the, the implementation stages of the act. And so just to introduce myself briefly, so I'm Joanne Hanlon. I work in our company secretarial team supporting clients to implement the changes that are required under the under, under ECCTA, I'll call it ECCTA from now on. And obviously just working alongside Companies House and some of our legal entity management alliance partners in terms of, you know how we actually implement this on a day-to-day basis for subsidiaries and entities in the UK.

So I will just start very quickly. Sorry, let me just move the slide along.

So there we go. OK, just to just to let you know what we'll cover today. So I'll go through the timeline of the changes that are being introduced. Some of the changes have already come into effect and some of the changes are coming through this year and then there are some future changes. So I'll just run you through on a sort of high-level basis as to, you know, the timeline of, of those changes that are coming in and, and when we're expecting the impacts to hit entities here in the UK. I'll then cover some of the, the new powers that the registrar has and, and what we're seeing from Companies House in terms of how they're actually using those powers and, and what they're doing to try and make sure that they're keeping the integrity of the data on, on their registers. I'll cover very briefly the new concept of an authorised corporate service provider and the activities that they can undertake or the activities certainly that they will need to undertake in future. And also identity verification, which is probably one of the biggest changes that we we're seeing sort of in this time period at the moment is the kind of the opening of the voluntary. For identity verification, I'll also cover the changes that are going to be introduced in terms of who can file documents with Companies House and also the reforms to UK limited partnerships. And then we'll touch briefly on the new failure to print fraud regime.

So we do have some opportunities to share knowledge between US and share some insights as to how our organisations are preparing for the changes. So we will, we'll take a few polls and a few touch points throughout the session, but do feel free to raise your hand, ask any questions as we go through. I'm more than happy to answer where I can in terms of sort of any insights that we've seen or any clarifications on anything that's unclear so far in, in the way that the legislation's been implemented.

OK. So just before we get into the, the sort of substance of the session, I just thought it might be nice if we can share some knowledge between us around, you know, what, what do we do to keep up to date with, with legislation changes? So obviously there's, there's lots of changes coming through all the time, but what, what do you do as an individual or as an organisation to try to keep up to date with those changes? And just to share some tips among us, there might be some, some information here that that some of us can utilise on a day-to-day basis going forwards. So feel free to pop your answers into the into the slide box and hopefully you'll see some of the responses come out of there.

OK. And sorry, Adrian, I don't know if we've seen the responses come up or if nobody's put anything into the box can are you able to tell? Sorry, Adrian.

Adrian: Yes, sorry. Everybody needs to. If you if you put an answer itself, you can see it as well. You can see the answers if they come up.

Joanne: Oh, OK. Oh, OK. I can see now.

Adrian: Great.

Joanne: Yeah, there we go.

So we've got a few, a few sort of good, good tips there. I think coming through hopefully you can see those on screen.

So just to just to pick out a few of them obviously updates from Companies House. Yeah, that's absolutely, absolutely key. Certainly at the moment, particularly for this these changes that are impacting sort of the way that we work with Companies House. So, yeah, they've got a, they've got like a, a newsletter that they, they circulate and obviously LinkedIn, if you follow their page on there, they, they're sort of sharing lots of updates as well. Yeah, absolutely. Webinars and news updates from firms. That's a really good way to just to hear how, you know, various, various bodies are approaching the legislation and your legislation. PLC legal updates. Yeah, that's, that's definitely, that's one that I use on a sort of daily basis. You can set your notifications for, you know, for how regularly you want to receive updates, but that's a really good place to get some updates. So some really good tips there. Thank you. Thank you all for sharing.

OK, so very briefly for those that were not on our previous update or for those that haven't yet heard of ECCTA or been involved in its implementation, I'll just cover a little bit about the background to why the legislation was introduced. Essentially in the UK, if you were wanting to commit economic crime, you'd have a very good way to go about doing it in that you could register AUK company or UK entity without any particular cheques being done at the moment. You could say you were any particular individual, whether they are a real person, or you know or not, not a real person and you could register that company. It would then obviously appear on their UK register and you would appear to be a legitimate company. And you know, it would only kind of be discovered further down the line if he wasn't making your sort of your filings, your confirmations, etc., that are required. And so I am this gap has been noticed and decided that we need to do something about, about that gap. And so Ekta has been brought in and lots of changes been brought in to tackle the abuse essentially of the UK, the UK sort of corporate structure system for the use of economic crime. So really to try and clamp down on that and to make sure that that people dealing with UK entities can be sure that they are legitimate entities and that they are operating for lawful purposes. So that's the kind of the reason why. Sorry, did someone want to say something there? No, OK, yeah.

So that's kind of the reason why ECCTA has been introduced. So it's quite a wide-ranging reform. There's lots of changes to various pieces of legislation including the Companies Act, Limited Partnerships Act, etcetera that are being introduced under ECCTA. So some of the changes within ECCTA, they are essentially amending the company's act. So you can kind of see the company's act changing over time. Some of the changes are stand-alone within ECCTA. So for example, failure to print fraud sits entirely within ECCTA itself rather than sort of flowing through into the company's act. So just obviously need to be aware as to what pieces of legislation are changing. And, and for example, if you have your company's access on your desk in in hard copy, make sure you've got an updated version because there are some significant changes to it.

So moving on to the timeline. So we have seen some of the changes under it to be introduced already. So from the 4th of March 2024, Companies House had new powers and had new abilities to query information and was also requiring companies to provide a registered e-mail address and ensure that their and registered office address was an appropriate address. So for example, PO Boxes, et cetera, are no longer able to be used by companies. So this is all just around kind of digitising their services, making sure that they can reach out via e-mail to companies, to people that are going to be able to respond to their queries. And I'll touch some more on the queries in a moment. So that that has come in already. We are seeing the changes now come through at the moment for identity verification. So we're currently within a voluntary. For identity verification and individuals that are required to have their ID verified can go and do so. At the moment, there's no sort of mandatory requirement at this point in time, but that is expected to come through in autumn of this year, autumn to winter of this year, we're expecting to see that come through. And how that will come through is when there's confirmation statements becoming due from the mandatory date. Once that's announced, you will need to have ID verified for those individuals linked to that that entity when that confirmation statement is filed. So you'll need to kind of line the timeline up to the confirmation statement dates.

So in terms of future powers and what's coming in, in future, 1st of September is the key date before failure to print fraud. So the changes under failure to print fraud, I will cover in, in some more detail at the moment. But what we're seeing is that companies are preparing for the new offence and ensuring they have their reasonable procedures in place in advance of the new offence coming in into effect from the 1st of September. So those procedures do need to be in place by the 1st of September. So companies are working through those changes at the moment. Before that date, there will be some changes to accounts coming through that will be quite a bit further down the sort of ECCTA implementation timeline. We're not expecting that to come through probably for another two years, maybe more. There's lots of changes that companies have to need to do to their infrastructure in the background, lots of changes in terms of software, which is obviously they need more support with. And so when, when these changes come through, there will be an impact on essentially on the timeline for tagging accounts and the way that you file accounts with Companies House, for example, you won't be able to paper file anymore. They'll need to be digital in IXPRL format. That will be much sort of further down the line. And I'm sure we'll probably do another session if, if Monaco will allow us to talk to you more about that as and when that comes through.

Again, limited partnerships and the reforms relating to limited partnerships are coming in future and expected to be probably more in a sort of one to two year. So again, we can do another session with you, and I will touch some more on those changes now. But we can cover this as another sort of hot topic as and when that becomes closer to sort of an implementation time when we all start need to think more about limited partnership reforms. OK. So moving on to our next poll.

So as you can see the changes that ECCTA introduces do have sort of cross functional impacts. And so we are finding that there needs to be a sort of holistic approach across an organisation to deal with these changes and to keep on top of the impacts upon each function for those various changes. And so just a very quick poll, does your organisation have a working group, A cross functional working group to support the changes introduced by ECCTA?

Don't worry if you're not sure, but it'd just be interesting to see, you know, how many organisations are actually sort of working on a cross functional basis. You want to submit your answers.

Great. OK. I mean it seems like fairly evens for, for, for the results there. So that's, that's interesting. And I know that some, some organisations are starting to create working groups as well. So just something to think about, something to sort of ask around your organisation as to, you know, how, how it's being sort of dealt with on that cross functional basis to make sure that the impacts are reflected in procedures for, for, you know, all the functions that are required to, to kind of take note of them.

OK, so let's move on, I think to our, our sort of more substantive part of, of our session. So registrar's objectives and powers, as I mentioned, these are already in force. So a little bit about what we're seeing from Companies House as to how they're exercising these powers. So on screen you can see the different powers that they've got. What we're seeing is really Companies House use these powers to at the moment query information that has been disclosed around persons with significant control. So we're seeing Companies House use that registered e-mail to companies to say, we're not sure that your PSC filing your PSC disclosure is accurate based on the PSC regime. And they're requiring companies to go back and review their disclosure and confirm to Companies House if their disclosure is accurate or to make the updates. If it is not accurate, you know, and they give them a certain time period to respond, and they'll follow up if there has been no response. So that's one way that we're seeing Companies House exercise their new powers so that that querying of information on the database and trying to make sure that the objective of transparency around ownership of companies is being achieved.

In terms of financial penalties, we haven't yet seen Companies House sort of make any additional financial penalties applicable to companies at the moment, but they do have some guidance in terms of how they're expecting to exercise that new power to issue financial penalties. So previously financial penalties would typically only be levered against late accounts filings and that would be at the point in time that the accounts are filed, they would determine sort of the level of the penalty and based on how late the accounts are. In future we are expecting Companies House to use their powers to issue penalties for other breaches of Companies Act requirements around disclosures etcetera. For companies they're they've got like a tiered approach. So if you read the guidance, it says that the approach will kind of become more severe as companies become less compliant. So if for example, you have, you know, filed one confirmation statement late, but you're up to date with all your other filings and you're seen as, you know, a compliant entity, then it's unlikely that they would sort of issue financial penalties in a severe in a severe way that if you know through their tie ring. But if you are a company that is regularly not and keeping your disclosures up to date and you know, regularly missing finding deadlines, etcetera, they would start to move you through that tie ring system and deal with it in a proportionate way. As you know, as would be in the public interest and to make sure that information for entities is accurate, is up to date, is fully transparent. So again, like I just mentioned before, we, we aren't seeing that come through yet, but we are sort of waiting to see how Companies House actually implements this in practise. In terms of the penalties that apply.

I've already talked about registered e-mail address, registered office address, won't cover that too much in more detail. Now most entities would have already dealt with this requirement because it was part of the confirmation statement that would have been due over the past year. And we're kind of out of that 12-month transition period now. But just to obviously highlight that they are new requirements for entities to have an e-mail address and an appropriate registered office address.

I will spend some time talking about lawful purposes. So although most companies would have submitted their confirmation statement now for the period that included the new requirement for a lawful purpose statement, there is still quite some debate out there as to how companies are dealing with this new statement. So the lawful purpose statement is essentially a confirmation that the directors of the company are providing to Companies House on an annual basis that the activities and the intended activities of the company are for a lawful purpose.

Now, the complexity here is that there is no statutory definition of lawful. So it can be construed quite widely, and it is expected that Companies House is going to use the fact that companies and directors have submitted this statement to sort of bring them on the hook for various, you know, various breaches of, of, of law. So we do need to take this, this statement seriously. You know, I think when it first came out, it was essentially just another tick box on, on the confirmation statement. And so many and those that are submitting confirmation statements on behalf of companies were sort of ticking it and moving on without much more thought into it than that. But we have had many discussions with companies with clients on, on how this should be dealt with and the sort of controls that should be in place around the statement being made. And how many companies we understand are implementing sort of taking this statement to the board at a board meeting or in a board resolution. Perhaps at the same time, the accounts approved to ask the board to specifically confirm that they're comfortable with that statement to be made. And obviously then the board does need appropriate management information for them to be able to make that statement. So it's just making sure it's all tied back, all documented so that there is a defence should something go wrong in future, that the directors of the company have taken the appropriate steps to confirm that the activities of their company are awful. So just something that seems quite straightforward on paper that, you know, you start to see it triple down into the governance of subsidiaries across organisations. Similarly, just a touch, they're around in corporations, so the subscribers of the company must also make that statement that the activities of the company are going to be for a lawful purpose. So similar around incorporations, make sure that it's being documented and properly considered as and when new entities are incorporated across your organisation.

OK.  So just a quick poll again then. So just to maybe share some of our knowledge and some of the activities that that we're taking across our organisations to make sure that we're complying with some of those new powers. So just a couple of suggestions here as to activities that you might be taking if you want to submit your answers, and we can sort of see what everyone's doing in terms of preparing. Thank you.

OK. So looks like quite a lot are taking sort of all of the actions that we've suggested. So I mean, definitely, really, really key to make sure you're monitoring that correspondence that's received from Companies House. You know, obviously people have probably submitted e-mail addresses with their confirmation statements to register as a registered e-mail address, but it's really important that that e-mail address is monitored and maintained. So for example, if it's an individual's e-mail address, you know, are they still with the organisation? Is it being updated on a regular basis? Is it being checked on a regular basis just for any queries that are coming through from company's house? And again, monitoring of compliance deadlines just to make sure that you are seen by a company's house as a, as a compliant entity and that you don't start to sort of fall down that tier in system and be dealt with in a more severe way than you necessarily need to be. Again, health check of corporate data against a company's house. So this is really tying back to, is your data accurate? Are you comfortable that what's reported at a company's house is the same as what you've got on your internal registers or on your internal systems? You know, are your PS CS accurate? Are the directors that are recorded on your internal systems/registers against your entities? Are they, you know, do they need to be updated? Are they still around? All of these types of things? Just doing that check, making sure that everyone's comfortable, the information is accurate.

OK, so moving on now to ACSP and ID verification. So ECCTA has introduced this new concept of an authorised corporate service provider. So entities that are monitored, supervised by an AML body. So I registered with AML bodies are able to apply to become an ACSP. Now an ACSP is going to be an important concept, particularly when it comes to limited partnerships. So in future limited partnerships will have to use an ACSP to make their filings. And this is just tying back to that, you know, extra layer of comfort around who's making filings on behalf of entities. And obviously for an entity registered for money, anti-money laundering supervision, then you would expect them to be a sort of legitimate body, legitimate corporation. So that's one reasons why an ACSP would be really key. And then at the moment in the in the current phase that we're in, in terms of the ID verification, ACSP can complete ID verification on behalf of individuals. And that's particularly important where some individuals may not be able to utilise the more the one Gov login route for ID verification. I'll touch on that in a moment as well. So a couple of key reasons why an ACSP is an important concept. There are, you know, other activities that ACSP can undertake next year. Findings will only be able to be made with Companies House if you are an ACSP or if you have your ID verified. So that's another, another way that the ACSP will kind of support this the principles of the of the new legislation.

So ID verification the big one at the moment, the real, real hot topic at the moment. So as I mentioned, we are in the voluntary. At this point in time. We are expecting the mandatory 12-month transition period to come into effect later this year, most likely autumn time. But we are yet to obviously receive the date from companies houses to us when they're ready to go live with the mandatory. So who needs to have their ID verified? So individuals who are directors of UK registered entities must have their ID verified. Individuals who are registrable. PS CS. So if you have an individual who is the person with significant control in your entity, in your organisation, then they would need to have their ID verified. Where you have a relevant legal entity disclosed as your PSC, for example, another court, another UK corporate entity, the regime is going to require an individual officer called a relevant officer to be identified and for their sorry to be notified and for their identity to be verified. And it might be in most instances that that relevant officer is already a director of Auk entity. And so they, they would have had their ID verified in any case for that purpose. But it might be that that person is, you know, outside of the UK or is not a, a director of an entity. So we just need to make sure that you're identifying the relevant people that that need to have their ID verified and on and on the point there around the relevant legal entity ID verification requirements that is going to come at a later date. Companies House has confirmed that that that's not kind of part of this current phase and that that will come at A at a slightly later date. So just, you know, keep on top of when you would need to start to notify those individuals. Again, something that's going to come at a later date, probably next spring is around the individuals that are filing documents with Companies House. So for example, those in sort of company secretarial teams or those filing mortgages and charges with Companies House on behalf of entities will need to have their ID verified as well or, or they would need to use an ACSP to make filings. So you've also got members of LLPs. So all members of an LLP would need to have their ID verified. And that's, that's kind of a part of this, this current phase. And then obviously in future once we have the limited partnership changes that will be, there will be ID verification requirements there around general partners of the legal entities. Something Companies House have clarified recently for us is around directors of overseas companies.

So directors of overseas companies do fall within the ID verification regime, and they are going to be expected to complete ID verification. It's unclear at the moment as to how that's going to be mandatory, but they can take advantage of the voluntary ID verification. I, I say about it's, it's unclear for the, the mandatory aspect of directors of overseas companies with UK establishments because they don't have currently a confirmation statement that's required to be filed. And there's no plans at the moment for, for that to become a, a requirement. So we're waiting to see how they're going to enforce the directors of overseas companies where they have UK establishments registers how they're, how they're actually going to force the ID verification requirements for those. But they have confirmed it is a requirement. And so we'll kind of wait to see more on that I think over the over the coming months. So you can see it's quite a wide range of individuals that are required to have their ID verified. So how do those individuals go about verifying their ID? So I should mention that for ID verification, each individual will only need to complete their ID verification once. There's very, very limited circumstances as to when they would need to re verify their identity. Even if they were to change their name, change their passport, they wouldn't need to reverify, reverify their identity. Once they have been established essentially as a proper person and that they are who they say they are, they don't need to essentially maintain that status. That status just sits with them. You know, they only need to do it once and that can that that the verification can sit with them across multiple entities. So they need to do it once even if they are appointed to multiple entities, they essentially receive a code, and they can apply that code to all of the entities they're appointed to. So the roots are you can do it directly with the registrar. As I mentioned, there's a one Gov login. So individuals that are required to complete their IDV can go to the one Gov login at the moment and complete their ID verification. Only certain documents will be accepted by through the one Gov login. So for example biometric passports, et cetera. That would all be quite straightforward or quite simple for someone to complete. But where they don't have a biometric passport, it becomes slightly more complicated, and they may need to consider alternative routes such as utilising an ACSP. So an ACSP if they have gone through the Home Office training would be able to complete a manual check. So most ACSP would have procured technology to do A to allow them to utilise technology for the ID verification much in the same way that the one Gov login would work.

But if you know, if individuals can't use that route via the technology because there are regulations and requirements around the types of documents that can be accepted via the technology, they will need to kind of go down the manual open the ACSP should be able to help with that. Just one note on that. So if individuals in your organisation are utilising the direct route with Companies House to complete their ID verification, they would need to log into their account and obtain their code and share it with those that are maintaining the registers of the entity and those that are in charge of governance of the entity in the organisation, which can then obviously become tricky. So the, the sort of the benefits of users and ACSP is they could manage that century, they would have access to that that code. They wouldn't need the directors to sort of take that additional step to then go and provide the code to those that are charged of governance. OK, so just a just a quick point here. We are expecting there to be restrictions on directors who don't complete ID verification. So they in future they will not be able to act as a director unless their ID has been verified. And also a really key change here is that if their no, their directorship hasn't been notified to two Companies House, they would be prohibited from acting as a director. So at the moment, typically what you might see is that a director gets appointed, and the appointment is a sort of a later event that it will be notified to company's house. You know, when I say a later event, you know, a day or two later or so, you know, sometimes we do see that it's, you know, much further doubt that line when someone goes, oh, they was appointed and the notification hasn't been done, that will become an issue in future and there would be a breach, you know, an offence taken by those that are active if their directorship hasn't been notified. 

So another key change to note there. OK, so I mean, ID verification, it's, it is causing a lot of noise, you know, and there are lots of concerns around it. So I just thought it might be helpful for us to sort of share concerns that we think that that our organisations might be facing when asking individuals across their organisation to complete ID verification. So I have some suggestions there, but obviously do feel free to sort of share with us otherwise any other challenges that you think we might be seeing?

OK. Thank you all for submitting your answers. So just to go down, go down that list really. So I mean, push back from those that need to complete IDV that's probably 1 to be managed in terms of communications and obviously explaining to those that are impacted why this needs to be done and what safeguards there are in place around the documents they're providing to either company's house or to the ACSP. And obviously there's, there's sort of lots of information out there that can be shared to provide that that level of comfort to individuals that are required to complete. I think typically what we're seeing at the moment is that those that are that have kind of come along on the on the journey with the new legislation coming into force are more comfortable with it than those that haven't. So if for example, overseas directors, you know, this is not usual for them to complete them, in some jurisdictions it is, but in obviously some it isn't, then we're sort of starting to see, you know questions and queries from those types of directors.

So I'm just going to read the question. OK. Our company is planning to register an ACSP as part of the application. Do we need to show that we have a verification technology in place? Is it always a requirement or can IDs be manually verified by our company? OK. Now good question on that. So the application, no, I don't think you need to have verification technology. You can apply to be an ACSP without having that technology in place. Obviously the technology would be a useful tool for you to use. But yes, IDs can be manually verified. But I think there is training that needs to be undertaken by the Home Office because there are quite stringent cheques that need to be done on the documents when you're manually verifying them and the requirements obviously by the that's sort of set up by the Home Office. So there are requirements there. And did that answer your question?

Thanks. OK, I don't know if we can go back to the slide of answers. Not to worry if we can't. So, yeah, just briefly in terms of some of the other challenges for ID verification, particularly around capacity for teams to deal with the project management where there's a large number of individuals across organisations that are required to have their ID verified. Just in terms of that as a, as a standalone project, it's quite a burden on company secretarial teams or legal teams to complete. And obviously just you know, taking stock of all of the requirements and the different types of documents they might, might need to produce and the comms etcetera. It will take time. So it's just the capacity within teams is another sort of key challenge that we're that we're seeing there.

OK, any more questions on ID verification? I should mention actually that we have a webcast in early June that we are hosting with Companies House, and we will really focus more on the requirements around ID verification then. So we can have you all sort of added to that, that invite list for the webcast if you're interested. But yeah, do flag now if you've got any more questions on IDV before we move on. 

Nope. OK. All right.

Next slide, filing documents with Companies House. So I think I've, I've briefly touched on this already. Those that are making filings on behalf of the entities in their organisation do need to be aware that they will no longer be able to make those filings unless they have their ID verified from a date next year expected to be at some point in spring. Again, we don't have the exact date confirmed, but we are expecting it to be sort of spring next year. So just to make you aware that you will need to, to sort of identify across your organisation who's making those filings and obviously for what reasons and to make sure that that they have their IDID verified. We have a, a table in these slides and we can share these slides with you after the session today. As to, you know, who can file documents on behalf of, of companies in, in sort of what capacity there will be a statement that will have to be filed by that individual when they're, they're making filings and, and our table sets it out. I won't go through all of the detail of this today because different things apply to different organisations differently. And so we won't, we won't cover it all today. There's quite a lot in there. So I'll just hold that on the screen for a moment and then and then move on. 

OK. So just another quick, quick question just to help our sort of shift our minds to thinking about who is making filings around our organisations with Companies House, you know who might need to think about having their ID verified over the next sort of next year. Yep, some quite consistent answers there coming through, I think.

So as I mentioned earlier, typically you're, you're sort of your company secretarial teams will be making you know sort of most of most of the filings with Companies House on behalf of the legal entities. But you might find pockets of individuals across the organisation there for example, legal sort of dealing with transactions or dealing with mortgages and charges and you might find sort of finance teams are potentially filing accounts etcetera. So all of those individuals would need to consider the new requirements around having their ID verified. Thank you. Thank you for those responses.

OK, limited partnership reforms. So I don't know if you have limited partnerships in your organisations, but if you do, just another one to be aware of something that's coming down the line in future. The real key change is around having to utilise an ACSP to, to essentially file documents with the Companies House. There is kind of no, no other option other than using an ACSP in future. And there'll be confirmation statement requirements. Like its sort of very similar to the, the company's regime at the moment. The registered office address will need to be in the part of the UK where the LLP was registered. And we do know that there are, you know, many LLP's on, on UKL PS: on the register that don't currently meet this requirement. So again, just something to consider and to think about, you know, do we have the ability to use an address in the part of the UK where the LLP was registered? And if not, perhaps think about using an ACSP to sort of provide that to you. Similar requirements again around e-mail addresses just for that sort of digital communication from Companies House and the entity notifying changes of the LLP. So sort of similar as, as, as it is at the moment, but just obviously making sure that those updates to the LLP are, are being made again, ID verification will be required for the registered offices of, of the LLP and sort of these named contacts of, of GPS of general partners. There will be sort of differing requirements around dissolutions. So at the moment, if you have LLPs in your structures and if you've tried to dissolve them, you'll see that they do actually still sit there on the register. There's no way for Companies House to actually remove LLPs at the moment from, from the register. You can notify them that they've been dissolved, but they will still sit there on the register. So there will be new, new abilities of Companies House to deal with dissolutions and, and revivals in, in a, in a new way. And again, like I said, we'll, we'll share more on this as the requirements come more close, closer for LLP's. So just quickly moving on to our poll around UK limited partnerships. If you have UK limited partnerships, who will typically manage the records for those in your organisation? As we talk to clients, we are, I am seeing that it's not so much something that sits with the legal or the company secretarial teams. So you may not be aware of who looks after them, that's fine. But just be good to sort of hear the wider perspective as to who would typically look after them, you know, and who, who are our stakeholders here when we're thinking about the changes to the limited UK good to partnerships. Great. OK. So just another, another thing to consider there is you know, if you have LLP's, who's looking after them and are they aware of that these changes are coming? And are you bringing them into that compliance and governance structure within your organisation? You know, start to really sort of treat them essentially as, as you would do with any other any other company within your organisation. 

OK. So moving on to failure to prevent fraud. OK, so failure to prevent fraud where we talk about this new offence, we are mostly considering this from the perspective of large organisations. So the new the new offence is essentially to drive large organisations to make sure there's reasonable procedures in place to stop fraud occurring that would benefit their organisation and there's various sort of guidance around what those reasonable procedures would look like. The complexity here comes is where they've used the terms of large organisation. There is some confusion out there about large companies under the Companies Act and large organisations under the Economic Climate Corporate Transparency Act because they are two separate things. You might be looking at the criteria for a large organisation and think well that does line up with large companies and yeah, I absolutely do believe that this has been derived from the large company criteria. However, it is separate. There is no in the Companies Act for this criterion and so there has been an update recently to the size of companies and the thresholds under the Companies Act in terms of large, small, medium companies’ etcetera. There has been no update to large organisations. So we are going to start. And the other key difference here between a large company and a large organisation is that a large organisation is basically calculated on the size of the organisation as a whole. So if for example, you have auk subsidiary that has a parent company or you know another parent company, you know further up the chain of the consolidation, you need to include their figures in your calculation even if those parent companies are outside of the UK. So for example, if you have AUS headquartered business that has some UK subsidiaries, if those UK subsidiaries on their own right are not meeting the large organisation criteria, there may still be liability that could attach to them if at the consolidated level outside of the UK that criteria are met. So that's a real key point that companies do need to take account of when considering how this offence could attach itself to their UK entities. OK. So there is a, a, a sort of a very, a very a different perspective that you need to take when you're considering large organisations versus other legislation that touches on large companies. So just a point to note there. So the offence as we said is, is really to, to prevent fraud from happening in in UK entities that is for the benefit of UK entities. There does need to be this for the for the liability to touch. There does need to be this, UK Nexus. And another point to note is that associated persons could bring liability to the door of auk entity and an associated person could be someone such as like a contractor or a supplier. So you might need to make sure that your contractors and suppliers are applying your reasonable procedures if they committed a fraud that was to benefit your UK company. OK, so there's lots of aspects to this that that you might need to consider as you're implementing your reasonable procedures and to make sure that they're flowing down into the right, the right entities, sort of a subsidiary level. So you need to consider it as a whole from a, you know, an organisational enterprise perspective, but also make sure you're drawing down those procedures and that your individual boards that have that potential liability, whether or not they meet the criteria themselves for a large organisation are actively applying those procedures and have oversight of those procedures just so they can use it as a defence should they need to. And as I mentioned before, the offence comes into effect on the 1st of September and so those procedures would need to be in place by the 1st of September. More details there on what a fraud offence is. I won't go through all the details at the moment and the on the side it's kind of going through what the reasonable procedures sort of headlines are. And it might be that a lot of you know, a lot of organisations already cover some of these procedures. But you know, just something to be aware of and to read the guidance that was issued in November 2024.

As you can see, we've just got a question on this. So, yeah, so we are owned by AUK company. Our parent owns us and a New Zealand, NZ company together we and the NZ Co likely have more than 36 turnover and we alone have more than I mean access. Without UK parent be caught, then yes, would be likely that the UK parent would be caught. So there needs to be Auk Nexus. So if the fraud occurred in the UK, the UK company, then that would potentially be caught by the by the by the offence. OK, any further questions on failure to print fraud?

OK, so just, I think our last poll just very quickly touch on what we're, what we're doing across our organisations to just review that that liability boundary across the subsidiaries in our organisations. So just a quick touch point on, you know, has there been a review of the entities in your organisation as to whether you know which ones could be liable under the new offence?

OK. Thank you all for voting. So again, I mean this is another one of those changes on director that that definitely sits across more than one function. So you know, typically the controls that would be in the reasonable procedures that we put in place would not sit with, you know, with legal teams or with company secretarial teams would typically sit sort of more of your assurance and you know, internal control functions. But you know, there is that link and that link to make sure that what's being implemented at the enterprise level is being brought down into the individual entity level. And that's where legal teams and company secretarial teams can, you know, provide the support in, in terms of that aspect to make sure that on an individual entity basis that that defence is there, that you know, that those directors of those entities are protected.

OK, so just to summarise then on sort of things that we've talked about today and some of the key actions that that we are seeing organisations take to become prepared for these changes. So first around, you know, ID verification, gathering that list of, you know, who are those individuals that are going to need to have their ID verified, make sure they've got the appropriate ID documents available. And you know, being aware if they haven't got those ID documents available, what's the plan to deal with those? You know, going by the manual route, there's even sending them off to the post office as an option apparently. So I'm sure most of our directors aren't going to do that, but just to just to make you aware that, you know, there are options available. So just make sure everyone's planning to deal with those sorts of those, you know, those outliers that don't have those appropriate documents. And again, identifying who needs to, who's filing on behalf of the companies and just creating your, your comms plan for, for all those individuals that are impacted. Just briefly on, on corporate directors, the changes that are going to be coming through for corporate directors, they're not they're not coming through yet. So if you do have corporate directors in your organisation appointed to your entities, just take stock for now. There are potential changes coming through and essentially, you're not going to be able to have multiple layers of corporate directors appointed. Purely from a transparency perspective. What Companies House and what the legislation is trying to achieve is that corporate directors, you know, one layer will be OK, but then you would have to have individuals appointed to that that corporate director. But we get, we're not seeing those changes come through yet as expected in the future. I think we've, we've probably spoken enough around, you know, how you're going to deal with the ID verification. Are you going to do it directly you go via an ACSP, take a hybrid approach, you know, use some an ACSP perhaps do the project management aspect and deal with the outliers or to have an ACSP do the whole, the whole lot for you. So different options, but just to take stock and to understand how you're going to deal with that. And equally the timing there is a, there is a possibility of filing confirmation statements early before the mandatory, the mandatory date is announced so that you have essentially have a longer period to complete your ID verification. So, you know, consider if you need to do that. If you think there's going to be some more complex cases to deal with registrar powers, again, make sure your filings are up to date, checking your internal records against what's the company's house. And again, as just to really highlight, it's so key that somebody is monitoring that registered e-mail address for, for your company. Obviously we've just spoken about UK Liberty partnerships. Consider if you're going to need to appoint an ACSP to act on, on your behalf and make sure that there's some frameworks starting to be put in place around how the, the new compliance requirements will be managed. Failure to print fraud. Just consider, you know which, which parts of your organisation are at, you know, highest risk of, of liability for the failure different fraud difference. But also making sure that your legal teams, your company secretarial teams are working closely with those responsible for the internal controls around those reasonable procedures to make sure that that's that tie in is happening and that the procedures are to the subsidiary level. 

Any questions as we as we close? No. OK, well, I think that that covers us for today. As mentioned, we have got a webcast coming up in in early June, which we can have you all added to it, if you so wish, maybe just drop us a note after this if you'd like to receive the invite for it. Ok.

Monika: Thanks so much Joanne for hosting us today. It was really informative session in the area where there's a lot of movement. And if there are any further questions, please feel free to reach out to Joanne. And actually you can take a look at anyone's questions. And likewise, if you would like to sign up to the Webex next month, next week, Joanne. 

Joanne: Yeah, yeah.

Monika: Do let us know and we'll add you to our list. And I believe that's it for today and we'll look forward to seeing you in our next session. Great.

Joanne: Thanks, Monika.

Monika: Thanks, everyone. Thank you.