Companies House has recently introduced new non-compliance penalties as part of the Economic Crime and Corporate Transparency Act 2023. These measures aim to enhance corporate transparency and tackle economic crime by ensuring that UK-registered companies adhere to their legal obligations.
Put simply, Companies House is evolving into a more proactive regulator with increased powers to query, challenge and reject information.
Overview of the new penalties
The new regime gives Companies House the power to issue financial penalties to individuals and businesses that fail to meet their statutory requirements.
These requirements include the timely filing of confirmation statements, maintaining accurate information, and fulfilling other legal obligations. The penalties are designed to drive better compliance and improve the accuracy of the company register while cracking down on misuse.
Consequences of non-compliance
The new penalties for non-compliance can result in substantial fines, which vary based on the severity of the offence and compliance history. Penalties can range from £250 to £2,000 with repeat offenders facing escalating consequences, including higher fines, civil action, and even criminal prosecution.
Beyond financial penalties, non-compliance can lead to increased scrutiny from enforcement agencies, potential disqualification as a director, and damage to a company's reputation. In extreme cases, directors could face imprisonment.
Implications for charitable companies
Charitable companies often have complex governance structures, with trustees and directors responsible for ensuring regulatory compliance as well as delivering activities. However, Charitable companies, like other companies, must ensure compliance with the new regulations to avoid financial penalties and reputational damage. It is therefore vital that trustees stay informed and receive regular updates on their legal obligations.
As Companies House’s regulatory reach widens and become more proactive, charities considering incorporation - and those already established as a company limited by guarantee - may find the idea of a Scottish Charitable Incorporated Organisation (SCIO) a more attractive option.
The SCIO was designed for specifically for the charity sector and means that trustees do not need to comply with the quirks of additional company, or indeed trust, law obligations which are not always relevant for charities. With these Companies House obligations, SCIO status could reduce adding to the compliance burdens on charities.
If you would like to discuss your regulatory obligations or are interested in the benefits a SCIO might bring to your legal structure, please get in touch - we would be delighted to assist.
Published 14 April 2025
