A publicly accessible Register of Overseas Entities came into force on 1st August 2022 through the Economic Crime (Transparency and Enforcement) Act 2022.
The deadline to make a submission to the Register of Overseas Entities is 31st January 2023.
The register, which is held at Companies House, requires overseas entities that own UK land or property to declare their beneficial owners and/or managing officers by this month’s deadline.
Severe penalties may apply for non-compliance, including restrictions on buying, selling, transferring, leasing, or charging of land or property in the UK, as well as fines of up to £2,500 per day, or a prison sentence of up to 5 years.
There is a £100 registration fee payable when applying to register an overseas entity.
This applies to:
- Non-UK legal entities, principally companies and certain partnerships, including those incorporated in Jersey and Guernsey.
- Non-UK legal entities which own UK land and property and acquired this after 1st January 1999 (8th December 2014 in Scotland and 1st August 2022 in Northern Ireland).
- Non-UK legal entities which no longer own UK land and property but sold UK land and property on or after 28th February 2022.
Information to be provided:
- Registrations from overseas legal entities must include the following:
- Details about the overseas entity;
- Details of any registrable beneficial owners; and
- Details of the UK-regulated agent that carried out verification checks.
- Individuals and legal entities will be registrable beneficial owners if they meet one or more of the following conditions, and are not exempt for any other reason:
- They directly or indirectly own 25% of the shares in the overseas entity;
- They directly or indirectly own more than 25% of the voting rights of the entity;
- They hold the right to appoint or remove the majority of the Board;
- They have the right to exercise, or do exercise, significant influence or control over the entity.
A UK-regulated agent must complete verification checks on all beneficial owners and managing officers of an overseas entity before it can be registered.
These checks must be completed no more than 3 months before the registration. An agent assurance code and an overseas entity verification checks statement to confirm that these checks have been performed.
An annual update is required that either:
- Confirms the overseas entity has no reasonable cause to believe that any registrable beneficial owner has become or ceased to be such during the update period; or
- Provides details and relevant dates of each person who became or ceased to be a registrable beneficial owner during the update period.
The deadline for the annual reporting is 14 days from the end of the year, based on the anniversary date of the registration.
UK Companies House register – new identity verification regime and ACSPs
Furthermore, the UK Companies House register will soon require that all individuals who register companies or file with the Registrar will have to prove who they are by verifying their identity.
This will apply to all new and existing registered company Directors, People with Significant Control (PSCs) and anyone else filing with the Registrar.
This process will apply to most existing companies that are registered on the UK Companies House register, as well as to new registrations going forward.
The consequences of non-compliance with the identity verification requirements will depend on circumstances. An individual who fails to comply with the requirement to verify their identity with the Registrar could be subject to:
- Criminal proceedings that could result in a Level 5 (unlimited) fine
- Civil penalties issued by the Registrar of Companies
- Prohibition from acting as Director
- Prevention from making statutory filings
- Annotation of the public Register to show the individual’s status as ‘unverified’
- Rejection of incorporation of a new company
These measures will require new secondary legislation and guidance, as well as system development, under the Economic Crime & Corporate Transparency Bill, which entered Parliament on 25th November 2022.
Assuming it receives Parliamentary approval, Companies House has indicated that it expects the Bill to receive Royal Assent in Spring of 2023.
If you need to make a submission to the register or wish to seek clarity on whether a submission is needed, please get in touch with Williamson & Croft today.
We can remove the stress from ensuring your property is fully registered and ensure that you are compliant with the new rules.